Macy’s Inc. managed to eke out higher fourth-quarter profits despite weaker sales, while Target Corp.’s earnings fell even as sales rose slightly.
At Macy’s, earnings rose 2.3 percent to $750 million, or $1.73 a diluted share, as sales for the quarter ended Feb. 2 slid 6.2 percent to $8.59 billion. For the full year, profits fell 10.3 percent to $893 million, or $1.97 a diluted share, on a 2.4 percent drop in sales to $26.31 billion.
For the current year, the department store said comparable-store sales will range from down 1 percent to up 1.5 percent as earnings tally $1.85 to $2.15 a diluted share, exclusive of one-time costs.
Meanwhile, the cautious consumer spending environment hit Target’s profit margins in the fourth quarter, with an 8.2 percent drop in earnings. Net profits fell to $1.03 billion, or $1.23 a diluted share, as revenues at the Minneapolis-based chain inched up 0.8 percent to $19.87 billion for the quarter ended Feb. 2.
“Our financial performance in 2007 fell short of our expectations as the pace of sales and earnings slowed considerably in the second half,” said Bob Ulrich, chairman and chief executive officer.
Ulrich will pass the mantle of ceo to president Gregg Steinhafel in May.
For the full year, Target’s earnings rose 2.2 percent to $2.85 billion, or $3.33 a diluted share, on a 6.5 percent increase in revenues to $63.37 billion.
For further coverage, see Wednesday’s WWD.