May 9 (Bloomberg) -- Macy’s Inc., the owner of its namesake and Bloomingdale’s department stores, fell the most in more than eight months after keeping its forecast for profit this year lower than analysts’ estimates.
The shares dropped 5.8 percent to $37.21 at 9:36 a.m. in New York and earlier slid as much as 6.3 percent for the biggest intraday decline since Aug. 18. Macy’s had climbed 23 percent this year before today.
Profit this year will be $3.25 to $3.30 a share, Cincinnati-based Macy’s said in a statement today, repeating a forecast from February. Analysts projected $3.39, the average of 17 estimates compiled by Bloomberg.
The forecast was unchanged after first-quarter profit topped analysts’ estimates. Net income in the three months ended April 28 rose 38 percent to $181 million, or 43 cents a share, from $131 million, or 30 cents, a year earlier. Analysts projected 40 cents, the average of 16 estimates compiled by Bloomberg.
“They didn’t raise the annual guidance,” Liz Dunn, an analyst with Macquarie Group in New York, said in a telephone interview today. “For me, it is just too early in the year to do that, but the market seems like it is primed for any disappointment on stocks that have had nice moves.”
Revenue climbed 4.3 percent to $6.14 billion in the first quarter. Sales at stores open at least a year also advanced 4.4 percent, including a 34 percent jump in online sales.
Same-store sales will increase about 3.7 percent this year, faster than a previous forecast for a 3.5 percent gain, Macy’s said.
Chief Executive Officer Terry Lundgren has worked to keep marketing spending little changed to keep expenses shrinking as a percentage of revenue. The company’s “My Macy’s” program of better tailoring merchandise to local tastes has helped boost sales from its stable base of more than 800 locations.
Selling, general and administrative expenses shrank to 32.4 percent of sales from 33.5 percent. Dunn estimated 32.5 percent. The costs rose 1.1 percent in dollar terms to $2 billion, or at about a quarter of the pace of the revenue gain.
Dunn rates the shares outperform, the equivalent of a buy.
(Macy’s will hold a conference call to discuss earnings at 10:30 a.m. New York time today. To access, visit M US <Equity> LIVE <GO>)
To contact the reporter on this story: Cotten Timberlake in Washington at email@example.com
To contact the editor responsible for this story: Robin Ajello at firstname.lastname@example.org