Macy’s Not Working Miracles

Just a month after Macy’s, Inc. (M) announced it would be closing 11 stores and firing nearly 1,000 employees, today the company announced 7,000 more job cuts - 4% of the major retailer’s total workforce. This and other recent maneuvers are expected to save $400 million annually in SG&A costs beginning in fiscal 2010 (which has just started).

After the announcement, Macy’s shares plummeted down around more than 25% before recovering to somewhat less hysterical levels. But even so, the retail industry remains under a dark cloud after the worst holiday shopping season just about anyone can remember, and further negativity on particular companies only feeds back on itself in the market these days, especially in down trading sessions overall.

Currently, the Zacks Rank is #3 (Hold), but recent times have not been kind regarding estimate revisions. In just the past month, 8 analysts have lowered expectations for 4th quarter 2009 (ended January ‘09), 12 analysts have downwardly revised fiscal year estimates and 8 have done so for fiscal 2010. The company is expected to report earnings 3 weeks from tomorrow (Tuesday).

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