• Q3 sales down 3.9% to $5.277bn
  • Online sales soar 21%
  • Q4 same-store sales guidance improves

Cost cuts coupled with moves to tailor its merchandise to the needs of local markets have helped US department store chain Macy's to cut its third quarter loss.

The company said its loss narrowed to US$35m for the three months to 31 October 2009, compared with a loss of $44m in the same period last year.

Sales were down 3.9% to $5.277bn, from $5.493bn a year ago, while same-store sales were down 3.6%.

For the year to date, Macy's said sales fell 7.8% to $15.640bn, and that same-store sales were down 7.5%.

However, its online sales were up 21.1% in the third quarter and rose 15.6% for the year to date.

"Given the difficult economic climate, we had an excellent quarter," said Terry J Lundgren, Macy's chairman, president and chief executive officer. 

"Our business improved progressively each month during the period and we are entering the holiday selling season confident in our locally-focused organisational structure and the high caliber of our talent."

Quarterly restructuring charges were $33m, and relate to division consolidations and localisation initiatives announced in February.

The moves are designed to reduce costs and make the company more locally responsive to customers.

"We continue to see encouraging results from our My Macy's approach to local markets.

"Of our Top 10 districts in same-store sales in the third quarter, seven were among the original My Macy's pilot districts," Lundgren said.

"Other bright spots in the third quarter included a strong sales performance at Bloomingdale's and outstanding growth in our Internet businesses, which are being fueled by the ongoing multi-channel integration at both Macy's and Bloomingdale's."

The company expects same-store sales to be down 1% to 2% in the fourth quarter, which will give a drop of 2.1% to 2.6% in the second half.

This beats previous guidance for a 5-6% drop in second-half same-store sales.

Click here to view the company's full third quarter earnings statement.