By Michael Calia
Macy's Inc. said its business trends improved in April as the
weather turned, a positive sign for the current quarter, and the
department store operator also unveiled plans to boost its stock
buyback plan and dividend.
Chief Executive Terry Lundgren said Macy's saw softness in
January through March, with the exception of the Valentine's Day
shopping period, as the company posted a surprise drop in sales for
the quarter ended May 3.
"The fundamentals of our business and our ongoing strategies
remain strong," Mr. Lundgren said. "This, combined with the
momentum we have built over the past five years, leads us to feel
confident about the company's prospects."
The company, which reaffirmed its sales and earnings guidance
for the year, boosted its share-buyback plan by $1.5
billion--leaving $2.5 billion under the authorization--and raised
its dividend 25% to 31.25 cents a share.
Macy's is among the few retailers that have weathered declining
sales and traffic as consumers contend with a mediocre economic
recovery. However, that strength flagged in the most recent period,
as same-store sales for the period fell 0.8% including departments
licensed to third parties. Excluding those departments, sales fell
1.6%.
Overall, Macy's posted a profit of $224 million, or 60 cents a
share, up from $217 million, or 55 cents a share, in the
year-earlier period.
Revenue fell 1.7% to $6.28 billion.
Analysts surveyed by Thomson Reuters had projected earnings of
59 cents a share and revenue of $6.46 billion.
The company has also cut costs, closed stores and eliminated
jobs recently as it attempts to save $100 million a year. Gross
margin rose to 38.9% from 38.8% as input costs fell 1.9% to $3.84
billion.
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