Macy's returned to a fourth-quarter profit as lower expenses helped the department store operator even as sales dipped.

During the holidays, Macy's kept a tight lid on inventory to avoid having to clear items out at steep discounts, which cost it in 2008.

The nation's second-largest department store chain expects 2010 profit in range of analysts' views.

Macy's earned $466 million, or $1.10 per share. Adjusted profit was $1.40 per share, which beat Wall Street's $1.32-per-share estimate.

Last year's fourth quarter included hefty charges totaling 30 cents per share.

Sales slipped 1 percent to $7.85 billion, but met analysts' expectations.