For the first quarter ended May 4, Macy’s, Inc. today reported earnings of $217 million, or 55 cents per diluted share, versus $181 million, or 43 cents per diluted share, for the period last year. Comparable store sales increased 3.8% from last year’s first quarter.
Earnings beat a published analyst consensus estimate by two cents per share while sales were in line with the average assessment.
Overall sales in the first quarter increased 4% to $6.39 billion. Operating income was $435 million, or 6.8% of sales, compared with $391 million, or 6.4% of sales, for the 2012 first quarter.
“We are especially pleased with our first quarter sales and earnings performance given the challenges we overcame in this period,” said Terry Lundgren, Macy’s chairman, president and CEO. “These included sustained, unseasonably cool spring weather in our northern climate zones. In addition, we saw weakness among some of the most budget-conscious consumers, as well as among our higher household income Bloomingdale’s customers. We are continuing to pursue myriad new growth opportunities within our time-tested M.O.M. strategies: My Macy’s, Omnichannel and Magic Selling. These strategies continue to work individually— and in unison— at Macy’s to meet the needs of customers seeking fashion, quality, value and convenience.”
Lundgren added that the first quarter demonstrated Macy’s continuing ability, “to build on our success over the past few years in growing sales and earnings. Based on the effectiveness of strategies we have in place, we are confident that momentum will continue going forward, which is reflected in the actions we are announcing today to increase returns to our shareholders through an increased dividend and share repurchases.”
Macy’s board of directors authorized an increase in the quarterly dividend on the company’s common stock to 25 cents per share from the previous 20 cents per share. The board also increased Macy’s share repurchase authorization by $1.5 billion. In addition, on May 10, the company entered into a new $1.5 billion, five-year credit agreement that will mature on May 10, 2018. The new deal replaces a previous $1.5 billion facility maturing in June 2015, the company related.
In the first quarter, Macy’s opened one new store in Victorville, CA, the company noted.