Macy's net profit fell to $310 million, or 73 cents a share, in the fiscal fourth quarter ended January 31, from $750 million or $1.73 a share, a year earlier.
Excluding some items, Macy's said it earned $1.06 a share, topping the average analyst expectation of $1.01 a share, according to Reuters Estimates.
Sales fell 7.7 percent to $7.93 billion, as sales at stores open at least one year dropped 7 percent in the quarter.
For 2009, Macy's still expects to earn 40 cents to 55 cents a share, excluding restructuring costs.
Macy's said it is reviewing its goodwill tied to the August 2005 acquisition of May Department Stores due to the economic downturn and the decline in its share price and market capitalization. The process could result in a writedown of $4.5 billion to $5.5 billion in the fourth quarter, but no decision has been made yet, Macy's said.
Shares rose to $7.85 from Monday's close of $7.40.
(Reporting by Aarthi Sivaraman, Dave Zimmerman)