Macy's Quarterly Profit Rises Along with Same-Store Sales

macy's shopper san francisco
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Macy's reported higher first-quarter profit and sales Wednesday despite weak demand from some of its customers, and the department-store operator raised its quarterly dividend 25 percent.

The retailer, which operates the Macy's and Bloomingdale's chains, said comparable sales rose 3.8 percent, below the 4.3 percent jump analysts were expecting, according to Thomson Reuters I/B/E/S. Overall sales were in line with projections, increasing 4 percent to $6.39 billion.

Macy's Inc. (M) has benefited from large investments in technology, which have allowed it to use its stores to deliver orders placed online, fueling its e-commerce. It has also benefited from a sharp sales decline at rival J.C. Penney Co. (JCP) and a middling performance at Kohl's Corp. (KSS).

Still, Macy's Chief Executive Terry Lundgren said the company saw "weakness" in parts of its clientele, including among its more affluent customers.

U.S. retail sales in April were dented by cool weather in large parts of the country that prompted many consumers to delay spring shopping.

Macy's posted net income of $217 million, or 55 cents a share, for the quarter that ended May 4, up from $181 million, or 43 cents a share, a year earlier, and topping analysts' average forecast by 2 cents.

Despite the higher-than-expected profit, Macy's stood by its previous forecast for earnings of $3.90 to $3.95 a share for the full year, and a same-store sales rise of 3.5 percent.

The company boosted its quarterly dividend to 25 cents a share from 20 cents and increased its share repurchase authorization by $1.5 billion.

Macy's shares were up 2.7 percent to $48.65 in premarket trading. On Tuesday, the shares hit their highest levels in decades.

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