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To: Bill Harmond who wrote (48025)	2/2/2009 1:34:41 PM
From: Bill Harmond	Respond to of 57684

13:08 M Macy's sees FY09 EPS of $0.40-0.50 includes items, may not be comparable to $1.21 consensus; announces plan to cut ~ 7000 positions and reduce qtrly dividend (8.66 -0.29) -Update- Co announces a series of actions designed to position the co for increased sales, profitability and cash flow. These moves will prepare the co for accelerated growth once the economy recovers while reducing previously planned expenses by approx $400 mln per year beginning in 2010 (and $250 mln in the partial year of 2009). "My Macy's," will be expanded across the U.S. Given current economic conditions and expectations for lower sales in 2009, the co is taking other actions to increase profitability and cash flow. Macy's, Inc. is adjusting its workforce in stores, distribution centers and various corporate functions, as well as reducing discretionary spending. Moreover, the Board of Directors has voted to reduce the Macy's, quarterly dividend to 5 cents per share of common stock from the current 13.25 cents. And the co today commenced a tender offer to redeem $950 mln in debt that is maturing later in 2009. A new Macy's, Inc. executive management team will lead the corporation going forward under the continued direction of Terry J. Lundgren, chairman, president and chief executive officer. A net companywide total of approx 7,000 positions are being eliminated from the co's workforce in offices, stores and other facilities. The savings from the actions announced today, net of the amount invested in localization initiatives, are expected to reduce previously planned Macy's, Inc. SG&A expense by approx $400 mln per year, beginning in 2010. The partial-year reduction in SG&A for 2009 is estimated at approximately $250 mln. Pre-tax costs associated with today's announcements will be approx $400 mln in cash, most of which are expected to be taken in fiscal 2009. This will include severance and outplacement assistance for displaced employees, as well as relocation assistance. Including this sales assumption and impact of today's announcements, Macy's, is assuming earnings per share on a diluted basis of 40 cents to 55 cents, may not be comparable to $1.21 consensus, excluding restructuring-related costs, for fiscal 2009. Should the economic environment improve, the co says they would expect sales and earnings to exceed this level. The company has further reduced its 2009 capital expenditures budget to approximately $450 mln. This is $100 to $150 mln less than the $550 million to $600 million previously announced, and down from an original 2009 budget of approx $1 bln.