Macy's Outlook Disappoints, Shares Slip

Macy's narrows its loss in the third quarter and ups its full-year forecast.
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CINCINNATI (

TheStreet

) --

Macy's

(M) - Get Report

narrowed its loss in the third quarter and upped its full-year forecast by as much as 26 cents.

During the quarter, the department store recorded a loss of $35 million, or 8 cents a share, compared with a loss of $44 million, or 10 cents, in the year-ago period.

Excluding restructuring costs, Macy's only lost 3 cents a share, better than the 7 cent loss analysts expected.

Sales slipped 4% to $5.28 billion from $5.49 billion, while same-store sales fell 3.6%.

The company is beginning to benefit from the national roll-out of its My Macy's localization initiative, with some of its best-performing areas coming from those that were the original pilots for the program.

It also cited strength at its higher-end Bloomingdale's stores, and online.

Looking ahead, management expects full-year earnings in the range of $1.01 to $1.06 a share, better than the prior guidance between 70 cents and 80 cents a share.

Macy's predicts same-store sales will be down between 1% and 2% in the fourth quarter, which would translate to a decrease of 2.1% to 2.6% for the second half of the year. This is better than the decline of 5% to 6% the company previously forecast.

Despite the better-than-expected results, shares tumbled 3.9% to $18.67 in pre-market trading, as the company's full-year forecast missed Wall Street's consensus.

Analysts are calling for EPS of $1.11 a share in 2009.

Rival

Kohl's

(KSS) - Get Report

will report its quarterly results tomorrow, while

J.C. Penney

(JCP) - Get Report

will announce on Friday.

-- Reported by Jeanine Poggi in New York

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