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Macy's forecasts same-store growth in holiday season

Department store operator Macy's Inc forecast faster same-store sales growth in the holiday quarter, and reported a better-than-expected quarterly profit as costs fell.

Shares were set to open up 1.5 percent at $59.46.

Macy's said it expects same-store sales, excluding licensed businesses, to grow 1.8-2.8 percent in the fourth quarter, faster than the 1.4 percent growth a year earlier.

"... We are poised to capitalize on a return to more normalized weather patterns after the unusually severe snowstorms in the fourth quarter last year," Chief Executive Terry Lundgren said in a statement on Wednesday.

Same-store sales at Macy's, which also owns the high-end Bloomingdale's chain, has either declined or grown slower than a year ago for 11 quarters now, except the second quarter ended Aug 2.

The company expects to benefit from the rollout of its 'Buy Online Pickup in Store' facility at all large Macy's and Bloomingdale's stores, same-day delivery pilot projects and upgraded mobile apps.

Macy's has been investing heavily to compete with global fashion chains and online players such as Inc and offering more online-friendly services such as in-store pickups for online orders.

The company said net income rose to $217 million, or 61 cents per share, in the third quarter ended Nov. 1 from $177 million, or 47 cents per share, a year earlier.

Selling, general and administrative expenses fell a little more than 4 percent, helping operating margin expand to 6.8 percent from 5.7 percent.

Net sales fell to $6.2 billion from $6.3 billion.

Analysts on average had expected a profit of 50 cents per share on revenue of $6.34 billion, according to Thomson Reuters I/B/E/S.

Same-store sales, excluding licensed businesses, declined 1.4 percent, compared with a growth of 1.9 percent estimated by Consensus Metrix.