CINCINNATI -- Macy’s Inc. has exceeded analyst expectations with a profit of 55 cents per share in its first quarter. The company also announced a 25 percent increase in its dividend and outlined plans to repurchase an additional $1.5 billion in shares.
Macy’s stock was on the rise in pre-market trading. It opened the day at an all-time high above $48 per share, peaking at $48.91, up more than two percent from yesterday's close.
Macy’s earnings release can be found at www.macysinc.com . Sales increased 4 percent to nearly $6.4 billion for the quarter. Comparable store sales, which exclude new stores and closings, increased 3.8 percent. The dividend increase will bring shareholders a July 1 payment of 25 cents per share, up from 20 cents.
The share repurchase expansion means the company now has the authority to spend up to $2.6 billion to buy back its own shares. Investors like share buy backs because it can accelerate growth in earnings per share.
Macy’s CEO Terry Lundgren said the strong quarter was due to the company’s three-pronged strategy of localizing merchandise in its stores, improving customer service and making products easier to obtain through shipping and online purchase.
“We are especially pleased with our first quarter sales and earnings performance given the challenges we overcame in this period,” Lundgren said in the press release. “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.”