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Macy's Silence Speaks Volumes to Investors

When a public company stops issuing sales figures and guidance, take heed, even if those in the media don't.
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The Business Press Maven has only one piece of advice for what to do when a company stops offering monthly sales numbers and quarterly guidance: Drop everything, leave the campfire burning and run for the hills.

There are thousands of public companies that try to make information public. There is no use bothering with one that doesn't.

And so it is so curious -- not to mention deplorable -- that the business media has barely mentioned that


(M) - Get Free Report

is now mum.

The company reported yesterday. Profits were a few pennies better than expected, despite gruesome sales and other numbers. It is closing stores, firing employees and doing all the other stuff struggling companies do when times are uncertain.

But Macy's -- and this is a central development -- announced yesterday on a conference call that it no longer will report monthly sales number, which is all but de rigueur for public retailers. The company had previously said it would wash its hands of any responsibility to give earnings guidance. In other words: In uncertain times, it sees fit to add to investor uncertainty. In spades.

Look at how the company's CFO, Karen Hoguet, made the announcement on the conference call -- presumably before hiding under her desk. She used the kind of doublespeak you'd expect to hear when a public company decides to effectively not be public anymore.

We're moving on to 2008, but not talking about 2008. Our move can be interpreted by reasonable souls as a skeevy clam-up, but don't trust your better instincts. We are actually being more open ... even as we clam up.

Said Hoguet:

"Let's move on now to 2008. But before I talk about our outlook, I want to make sure that all notice that we are no longer going to report monthly sales. This combined with not providing quarterly guidance could be misconstrued as trying to cut back on the information that we are providing to investors. That is not the intent. In fact, our hope is that you will find the information we do provide going forward will be just as meaningful in helping you to effectively judge our performance and our outlook for the future."

You would be crazy to be involved in such a murky situation when most public companies, even struggling ones, try to be open, right? This is a central development for Macy's shareholders, right?

The answers seem obvious to me, but not to the business media.


ran this headline, favorably comparing Macy's to


(TGT) - Get Free Report

: "Profit Rises at Macy's and Falls at Target"

The tidbits about monthly sales numbers and lack of guidance? Not even mentioned.

Our own

also failed in this regard. It mentioned Macy's forecast, given earlier this month, without mentioning that the company has since gone out of the forecasting business. And it treats same-store sales similarly, not mentioning that the yearly forecast for a 1-1.5% drop in same-store sales will be met or missed without the aid of monthly figures of forecasts. Good luck putting your finger to the wind on this one.

Terry Lundgren, Macy's chairman, president and chief executive, brags about generating significant cash flow and aggression going forward, but doesn't mention the essential fact that forecasts won't be generated going forward.


Associated Press

did so as an afterthought, at the bottom of

this article, after Hoguet's saying the company should not be afraid of risk (like, uh, being slightly off on guidance), and it dutifully reported the yearly same-store sales the company is deigning to give.

And talk about subordinating defining news.

The Wall Street Journal

offers it as the final line in a

news roundup piece.

There is probably no bigger issue in how a public company deals with the public than whether it gives standard forecasts and sales numbers. When it retreats from doing so, it is big news. As an investor, treat it as such, even if the business media do not.

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At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;

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