Macy's 1Q profit rises, though cold chills sales
NEW YORK (AP) — Macy's Inc.'s first-quarter profit rose 3.2 percent, but the department store chain's sales fell short of expectations as cool spring weather dampened shoppers' desire for shorts and T-shirts.
Investors pushed shares slightly higher in premarket trading after Macy's stuck with its full-year profit outlook, citing improving business trends that started in April. The retailer also raised its dividend by 25 percent.
"Overall, business trends were soft in January through March, with the exception of the Valentine's Day shopping period," Macy's Chairman and CEO Terry J. Lundgren said in a statement. "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."
Macy's, a standout among its peers throughout the economic recovery, is the first of the major retailers to report first-quarter results that should provide insight into shoppers' mindset heading into the summer season. Wal-Mart Stores Inc. and J.C. Penney Co. are scheduled to report their results Thursday.
Like many retailers, Macy's was hurt by snowstorms and rain that kept shoppers away from malls in the winter months. The arrival of spring weather warmed up shoppers' buying enthusiasm, though it came too late in the quarter.
Macy's and others that cater to middle-class consumers are facing economic hurdles — while the job market is improving and the housing market is rebounding, the gains are not strong enough to sustain big shopping sprees.
Meanwhile, retailers are trying to respond to a shift toward buying and researching on computers and mobile devices. Macy's is trying to create a more seamless experience for shoppers who are going back and forth from stores to websites.
In late March, it named Chief Merchandising Officer Jeffrey Gennette president of the company, giving him additional oversight over marketing and the online business.
Macy's said it earned $224 million, or 60 cents per share, in the quarter that ended May 3. That compares with $217 million, or 55 cents per share, a year earlier.
Revenue slipped 1.7 percent to $6.28 billion.
Analysts expected a profit of 59 cents on revenue of $6.46 billion.
Revenue at stores open at least a year fell 0.8 percent.
Macy's shares rose 66 cents to $58.50 in premarket trading.