Macy's, Liz Claiborne report wider Q1 losses

NEW YORK -- The results were released as the Commerce Department announced that retail sales fell for a second straight month in April, raising new concern about consumers' willingness to spend, after some signs of improvement. A significant rebound in consumer demand would help end the recession.

The government report "continues to suggest that consumers remain under pressure," said Ken Perkins, president of RetailMetrics. "They are forced to save more because their value of retirement funds have been devastated, the value of their homes continue to decline and unemployment continues to rise."

Since the end of March, Perkins noted, retailers have raised first-quarter outlooks on signs of improving sales — a reversal of what happened since last fall, when spending dropped off a cliff. Still, he expects the industry to post an 18.5% decline in first-quarter profit from a year ago. That's better than an earlier estimate of a 25% decline, but "still awful"

"It's all part of this 'less bad' phenomenon, but we still need to see some earnings growth and sales growth," he said.

The Commerce Department said retail sales fell 0.4% last month, much worse than the flat reading economists expected. The April weakness followed a 1.3% drop in March that was worse than first estimated.

Cincinnati-based Macy's posted a loss of $88 million, or 21 cents a share, for the period ended May 2. That compares with a loss of $59 million, or 14 cents a share, a year earlier.

The results included restructuring charges of $138 million, or 5 cents a share related to consolidation of divisions and initiatives to tailor merchandise to local markets. Excluding those charges, the company lost 16 cents.

Revenue fell to $5.12 billion from $5.74 billion a year ago. Analysts surveyed by Thomson Reuters, who generally exclude one-time items, were expecting a loss of 20 cents a share on sales of $5.2 billion.