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Macy's reports profit surge in first quarter

Department store giant Macy's earned $131 million, compared with $23 million during the same quarter last year. The parent of the Macy's and Bloomingdale's chains had a 5.7% rise in total sales and a 38.3% jump in online sales.

May 12, 2011|By Andrea Chang, Los Angeles Times
  • A Macy's store anchors a mall in Culver City. The department store giant reported solid first-quarter results, including a surge in profit.
A Macy's store anchors a mall in Culver City. The department store… (Ricardo DeAratanha, Los…)

Buoyed by robust sales including a major boost online, department store giant Macy's Inc. reported solid first-quarter results, including a surge in profit.

The parent company of the Macy's and Bloomingdale's chains said Wednesday that its profit for the three months that ended April 30 was $131 million, or 30 cents a share, compared with $23 million, or 5 cents, in the year-earlier quarter.

Sales totaled $5.89 billion, a 5.7% increase over the same quarter a year earlier. Same-store sales, or sales at stores open at least a year, were up 5.4%. Online sales surged 38.3%, the company said.

Chief Executive Terry Lundgren said the Cincinnati company's better-than-expected earnings were the result of a "coordinated execution of a series of complementary customer-centric strategies."

Among them were a greater focus on exclusive merchandise and the company's My Macy's localization initiative, which tailors store merchandise to customer tastes and preferences by market.

"Our confidence derives from our belief that we remain in the early innings of implementation of our current strategies," Lundgren said. "We also are developing and testing a wide range of new ideas and innovations that will allow us to evolve with our customers and continue to improve our performance."

The company also raised its full-year sales and earnings outlook and doubled its quarterly dividend. Macy's now expects same-store sales to increase about 4% for the rest of the year and earnings per share to be in the range of $2.40 to $2.45, compared with previous guidance of $2.25 to $2.30.

Shares of Macy's rose $2.03, or 7.7%, to $28.36.

Bernard Sosnick, a retail analyst at Gilford Securities, called the results "remarkably strong" and said he was encouraged by the company's e-commerce development and improved advertising.

"It's confirmation that the strategies that they launched over the last few years are working and building upon itself," Sosnick said. "All these things are falling into place."

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