Macy's Earnings Surge on Rising Sales

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Macy's Inc.'s (M) first-quarter earnings soared because of rising revenue, tight expense controls and its efforts to tailor merchandise by region.

The department store chain also said Wednesday that it is doubling its quarterly dividend and raising its full-year earnings and sales outlook.

Macy's reported net income of $131 million, or 30 cents per share, in the three months ended April 30. That compares with $23 million, or 5 cents per share, in the same quarter last year.

Revenue reached $5.88 billion, up 5.7 percent.

Revenue at stores open at least a year rose 5.4 percent. The measure is a key indicator of a retailer's health because it excludes stores that opened or closed during the year.

Analysts expected earnings of 18 cents on revenue of $5.89 billion, according to FactSet.

"We are building a culture of growth at Macy's," Terry J. Lundgren, chairman, president and CEO, said in a statement. "Our performance cannot be attributed to a single factor, but rather to the coordinated execution of a series of complementary ... strategies."

Macy's has taken business from competitors in part by tailoring stock in each store to its region and by placing more emphasis on exclusive brands such as Material Girl from Madonna and her daughter Lourdes. The company gets about 43 percent of its revenue from private, exclusive and limited-distribution brands.

Macy's now expects revenue at stores open at least a year to be in the range of about 4 percent for the rest of fiscal 2011. Combined with actual first-quarter figures, that would calculate to growth of about 4.3 percent for the fiscal year. The previous outlook called for 3 percent.

Earnings per share are now expected to be between $2.40 and $2.45 per share, compared with $2.25 to $2.30 per share previously. Analysts had expected $2.34 per share, according to Factset.

Macy's said that based on "the strength, momentum and confidence in our business," it's doubling its quarterly dividend to 10 cents payable July 1 to shareholders on record June 14.

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Not Again

I just got a $829.99 iPad2 for $98.37 and my girlfriend snagged an awesome $1299 MacBook Air for only $137.93, its being delivered tomorrow. I would be a fool to keep paying high retail prices at places like Walmart or BestBuy, when I even sold a 37" HDTV to my boss for $600 that I only paid $78.24 for. I use two sites, both are good, SnagBids.com
and BidsGo.com

May 17 2011 at 10:04 AM Report abuse rate up rate down Reply
Susan

I totally agree with heidecko, but she only told part of the story. They are trying to get rid of the full time help so they don't have to pay benifits, they hire you for 20 hours or less and then work you longer hours depending on the sale or the week. So now they have people who don't know a thing about what they are selling and you have to search for them to ring you out. I figure eventually they will automate like the grocery stores and you can check yourself out. And their product in textiles is getting cheaper made, my Macy's charge says it all -0- balance.

May 11 2011 at 3:20 PM Report abuse rate up rate down Reply
heidecko

Now maybe they can PAY their employees what they are worth! Within the last few years they've taken away benefits, reduced 401K contributions, & harass employees for taking "personal time off" days that are provided by the company. All-the-while the big boys are lining their pockets with profits.

May 11 2011 at 2:55 PM Report abuse rate up rate down Reply
1 reply to heidecko's comment
gregnbellenmatt

I agree with you, no matter how good their sales are, the emoployees would never get the credit, the company does not care.

May 11 2011 at 3:28 PM Report abuse rate up rate down Reply
larry

I'm surprized Macy's sales are on the rise. In Bend Oregon, the Macy's store has "JUNK". Also the interest rate of 24.90% is tatally unrealistic.

May 11 2011 at 1:55 PM Report abuse rate up rate down Reply
wsntrmd

I am very happy to hear that Macy's is doing well. I had begun to fear that department stores will disappear altogether. Meanwhile the shopping "experience" at the big box stores has become about as warm and satisfying as flying on a plane is today. For example, Costco: immense stores requiring a lot of schlepping, hugely sized products, prices no longer dominantly competitive with smaller stores and local groceries. And perhaps most of all, having to stand in line behind people with bottoms with the breadth of the Queen Mary. I am not renewing my Costco membership. It just isn't worth it.

May 11 2011 at 12:30 PM Report abuse rate up rate down Reply