Macy’s Inc. is blaming the costs involved with integrating the stores it acquired when it bought May Company for its dive in second quarter profits. Net income plummeted to $74 million (16 cents per share) in Q2 from its place in Q2 last year of $317 million (57 cents per share). Taking out the merger integration costs of $60 million after tax or 13 cents per share, the numbers don’t look as stark, but they’re aren’t great: 29 cents per share versus 33 cents per share not counting the merger in Q2 2006.
Macy’s sales dropped roughly 2 percent from around $6 billion last year to $5.89 billion.
Macy’s, Inc. CEO Terry J. Lundgren said in a press release, “While the second quarter was below our initial expectations, we did see improving sales trends through the quarter in former May Company stores and in home-related merchandise categories. We are optimistic that our business can and will improve in the second half of the year, despite what appears to be a more challenging economic environment.”
Macy’s Inc. is the new name of what used to be Federated Department Stores. It operates more than 850 Macy’s and Bloomingdale’s stores in the U.S. and its territories.