By  on June 28, 1994

NEW YORK -- R.H. Macy & Co. reported continued strong financial results Monday, just four days before its executives were to meet with the top brass of Federated Department Stores to hear their rival's merger pitch.

Macy's said earnings for the four weeks ended May 28, before interest, taxes, depreciation and amortization, were $32.9 million, more than double the year-earlier EBITDA of $13.3 million.

On an operating basis, Macy's reported a profit of $6.4 million, compared with a loss of $7.4 million in May 1993. At the bottom line, Macy's posted a net loss of $15.9 million, compared with a loss of $29.7 million in 1993.

Total sales in the month slipped 4.4 percent, to $452 million from $472.7 million last year. Adjusted comparable-store sales, reflecting the net effect of closed stores and the restructuring of the chain's electronics business, were up a marginal 0.5 percent.

The strong EBITDA and operating earnings results, which, according to Macy's, exceeded plan for the 16th time in the past 17 months, were attributed to better inventory management.

The company said paying closer attention to its back room resulted in fewer markdowns, lower buying costs and an 8.2 percent drop in the cost of goods sold. In addition, SG&A expenses were cut 4.5 percent over the year-ago period.

"Our ongoing ability to control costs and strengthen margins has enabled the company to consistently meet our internal plan and improve our year-to-year performance in EBITDA," Myron E. Ullman, chairman and chief executive officer, said in a statement.

Commenting on the soft sales during May, the firm said many of its markets were hurt by unusually wet and cold weather during the month. Bucking that trend, Southern California and the Southeast posted strong revenues, the company said.

At the close of the period, Macy's reported $476.3 million in total working capital availability. It said the level was $23 million ahead of internal plan.

On Friday, Allen I. Questrom, Federated's chairman and ceo, is scheduled to meet with Macy board members to present Federated's merger proposal. Roger N. Farah, who joins Macy's as president and chief operating officer this week and who formerly headed Federated Merchandising, is also expected to attend.Some view the meeting as further evidence that Macy's might be thinking about striking a deal with its unwanted suitor, while others said the face-to-face between the two department store titans is simply Macy's way of bolstering its own plan by listening to all other plans in circulation.

"There will come a time when the bankruptcy judge asks Ullman if he thinks his plan is the best," said a source close to the Macy's Chapter 11 case, explaining Friday's scheduled meeting. "How can Ullman say his plan is the best if he hasn't seen all the other plans?"

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