Page last updated at 15:09 GMT, Wednesday, 12 August 2009 16:09 UK

Cost cuts boost Macy's results

Shopper with Macy's bags
US retailers are facing hard times

US department store chain Macy's has reported better-than-expected results, despite profits tumbling 90%.

In the second quarter of 2009, the firm earned $7m (£4.2m), compared with $73m in the same period last year.

However, the results exceeded analysts' expectations once restructuring charges of $34m were stripped out.

In February, the Cincinnati-based chain said it would cut 7,000 jobs in order to make an annual saving of $400m against a backdrop of falling sales.

'Strong earnings'

Terry Lundgren, Macy's chairman and chief executive, said that the new organisational structure was working well.

"We were able to exceed our expectations with strong earnings and cash flow in the second quarter, despite lower sales in an economic environment that continues to be very difficult," Mr Lundgrem said.

The company, which operates more than 840 department stores, expects same-store sales - which exclude new shop openings - to be down by between 7% to 7.5% for the full year.

Despite this, the company raised its profit outlook for the rest of the year.

Department stores have been hit hard by the recession. With unemployment rising in the US and credit conditions tight, shoppers have kept their focus on essential goods, such as food.

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