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Macy’s Reports Positive 2014 Outlook Despite Soft Q1

Macy’s, Inc. reported earnings of 60 cents per diluted share for the first quarter of 2014, the 13-week period ended May 3, 2014, an increase of 9% compared with earnings of 55 cents per diluted share in the first quarter of 2013. Based on expectations for continued strong performance in 2014, the company also announced a 25% increase in its dividend on common stock and a $1.5 billion increase in its share repurchase authorization.

“Overall, business trends were soft in January through March, with the exception of the Valentine’s Day shopping period. The trend improved in April when the weather began to turn in northern climate zones. We see this as a good sign moving forward into the second quarter,” said Terry Lundgren, chairman/CEO, Macy’s, Inc.

“We continue to have a positive outlook for 2014 and are reaffirming the full-year guidance we provided in January. The fundamentals of our business and our ongoing strategies remain strong. This, combined with the momentum we have built over the past five years, leads us to feel confident about the company’s prospects,” Lundgren added.

Sales in the first quarter of 2014 totaled $6.27 billion, a decrease of 1.7%, compared with sales of $6.38 billion in the same period last year. On a comparable sales basis, Macy’s, Inc.’s first quarter sales were down 1.6% in 2014 compared with 2013. Together with sales from departments licensed to third parties, first quarter 2014 sales on a comparable basis were down 0.8%.

In the first quarter of 2014, Macy’s consolidated two stores in the same mall in Houston, TX, into one location as part of a mall redevelopment project.

Macy’s, Inc.’s operating income totaled $443 million or 7.1% of sales for the first quarter of 2014, compared with $435 million or 6.8% of sales for the same period in 2013. This represents a 30 basis point increase in operating income as percent to sales.