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Macy's To Streamline Management Structure; Targets Annual Savings Of $100 Mln

Macy's, Inc. (M) announced the company has launched a multi-year program focused on growing its profitability rate by improving productivity across the enterprise. As an initial step in this productivity plan, the company has announced a restructuring that reduces the complexity of the upper management structure to increase the speed of decision making, reduce costs and respond to changing customer expectations.

The company said the areas for cost reduction in 2019 have been identified and are reflected in guidance. Beginning in 2019, the company expects the restructuring actions to generate annual expense savings of $100 million. In addition to the expected 2019 savings, the company anticipates that these activities will fuel the productivity plan over the next 3-5 years and contribute significantly to profitable growth.

For the fourth-quarter, earnings per share, as adjusted, was $2.73 compared to $2.85, prior year. Owned comparable sales were up 0.4%, for the quarter.

For 2019, Macy's projects: EPS excluding settlement charges, impairment and other costs of $3.05 to $3.25; and comparable sales to be flat to up 1%.

In 2019, the company plans to: expand growth investment strategy to another 100 stores; and add backstage locations to 45 Macy's stores and deliver positive comparable sales for the Backstage stores previously opened. Macy's plans to invest in areas where the company already has strong market share to drive disproportionate growth. These categories are dresses, fine jewelry, big ticket, men's tailored, women's shoes and beauty. The company will double the number of Market @ Macy's locations, all of which will be powered by the b8ta platform. The company will also continue to expand its virtual reality furniture experience in 2019.

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