Retirement Plan Changes
Macy's, Inc. also reported that it will be making changes to its retirement plans in order to better plan and manage expenses in an environment in which healthcare costs are expected to increase. Effective December 31, 2013, benefits payable under the company's existing defined benefit pension and supplementary executive retirement plans will generally be fixed at current levels (subject to continued vesting of rights to receive benefits earned for service prior to that date and interest on such benefits). Effective January 1, 2014, company matching contributions under the company's 401(k) plan will be increased and a new defined contribution plan, similar in operation to the company's 401(k) plan, will be implemented to provide for income deferral and company matching contribution opportunities with respect to compensation in excess of amounts eligible for such opportunities under the company's 401(k) plan.
The company does not expect the changes to its retirement plans to have a material impact on retirement-related expenses for 2012. After giving effect to the savings from the changes to the retirement plans, the company expects retirement-related expenses for fiscal 2013 to be approximately $10 million higher than 2012 levels. Thereafter, the company expects such savings to offset increases in healthcare costs and to facilitate the achievement of its profitability goals (EBITDA as a percent to sales of 14 - 15%). In connection with the changes to its retirement plans, the company expects to record a one-time reduction in its retirement-related liabilities on the balance sheet of approximately $300 million in fiscal 2012. Actual amounts of retirement plan savings, healthcare costs and other selling, general and administrative expenses may vary significantly from period to period.
Discontinued Monthly Reporting
As previously announced in November 2012, Macy's, Inc. will discontinue reporting monthly sales, beginning in fiscal 2013, consistent with the practice of most other retailers. Sales will continue to be reported quarterly, along with earnings and cash flow.
Fourth Quarter Earnings Call/Webcast
Macy's, Inc. will report its fourth quarter earnings on Tuesday, Feb. 26, and will webcast a call with financial analysts and investors that day at 10:30 a.m. (ET). The webcast is accessible to the media and general public via the company's website at www.macysinc.com. Analysts and investors may call in on 1-888-277-7060, passcode 4317621. A replay of the conference call can be accessed on the website or by calling 1-888-203-1112 (same passcode) about two hours after the conclusion of the call.
Macy's, Inc., with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with fiscal 2012 sales of $27.7 billion. The company operates about 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's and Bloomingdale's, as well as the macys.com and bloomingdales.com websites. The company also operates 12 Bloomingdale's Outlet stores. Bloomingdale's in Dubai is operated by Al Tayer Group LLC under a license agreement.
All statements in this press release that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy's management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this release because of a variety of factors, including variability in the costs of providing healthcare and retirement benefits to current or former employees, conditions to, or changes in the timing of, proposed transactions, prevailing interest rates and non-recurring charges, competitive pressures from specialty stores, general merchandise stores, off-price and discount stores, manufacturers' outlets, the Internet, mail-order catalogs and television shopping and general consumer spending levels, including the impact of the availability and level of consumer debt, the effect of weather and other factors identified in documents filed by the company with the Securities and Exchange Commission.
(NOTE: Additional information on Macy's, Inc., including past news releases, is available at www.macysinc.com/pressroom).
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