The announcements came as the department store operator reported Thursday that a key measure of its December sales rose faster than analysts had expected.
Its shares rose 17 cents to $32.82 in premarket trading.
Macy's, with corporate offices in New York and Cincinnati, said that revenue at stores open at least a year climbed 6.2 percent in December. Analysts surveyed by Thomson Reuters expected a 5 percent rise.
Revenue at stores open at least a year is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.
In its latest earnings projections, Macy's said now expects quarterly earnings of $1.55 to $1.60 per share, with full-year earnings between $2.73 and $2.78 per share. Its prior forecast called for fourth-quarter earnings of $1.52 to $1.57 per share and $2.70 to $2.75 per share for fiscal 2011.
Analysts polled by FactSet expect fourth-quarter earnings of $1.62 per share and full-year earnings of $2.78 per share.
Macy's said Thursday that its revised outlooks exclude about $25 million to $30 million in costs tied to the five Macy's stores and four Bloomingdale's stores that it plans to close due to underperformance. Macy's announced those store closures on Wednesday.
Macy's is also boosting its outlook for quarterly and full-year revenue growth at stores open at least a year. For the fourth quarter the company predicts the figure will now rise 5.3 percent to 5.5 percent, up from a prior guidance for the metric to rise 4 percent to 4.5 percent.
Macy's now expects full-year revenue at stores open at least a year to climb about 5.3 percent. Its previous guidance was for the figure to increase 4.8 percent to 5 percent.
Macy's, with corporate offices in New York and Cincinnati, said that revenue at stores open at least a year rose 5.7 percent for the critical holiday selling period, which includes November and December results.
Macy's said its quarterly dividend will be paid on April 2 to shareholders of record on March 15. The last time the company doubled its quarterly dividend was with the one paid on July 1, 2011.
With the $1 billion increase to its buyback, Macy's says the total amount outstanding under the program is now $1.6 billion. The retailer has repurchased about 9.1 million shares for about $250 million through Dec. 31. It resumed buybacks in August.
Macy's has about 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico.