* 1st-quarter same-store sales up 3.8 percent
* Still sees fiscal year profit $3.90-$3.95 per share
* Dillard's 1st quarter same-store sales up 1 pct
* Macy's shares rise about 3 percent
By Phil Wahba
May 15 Macy's Inc reported higher
first-quarter profit and sales on Wednesday as it won market
share from rival department stores.
The company's shares closed up 2.5 percent at $48.57, near a
The retailer, which operates the Macy's and high-end
Bloomingdale's chains, said comparable sales rose 3.8 percent in
the quarter, a slightly below Wall Street expectations. Overall
sales were in line with expectations, according to Thomson
Reuters I/B/E/S, up 4 percent to $6.39 billion.
Macy's has benefited from large investments in technology in
recent years, which have allowed it to use hundreds of its
stores to deliver orders placed online, fueling its e-commerce
and giving it an edge over many department store rivals.
It has also gotten a bump from a sharp sales decline at
rival J.C. Penney Co Inc and a middling performance at
"I do think these guys (Macy's) continue to take share from
the J.C. Penneys of this world and the Kohl's of the world,"
Edward Jones analyst Brian Yarbrough told Reuters.
Many U.S. shoppers, especially those with lower incomes,
proved to be cautious earlier this year amid concerns about
sharp cuts in government spending and a wobbly job market.
"We are seeing some weakness among our more
budget-conscious, what we call deal-hunting customers," Macy's
Chief Financial Officer Karen Hoguet told analysts on a
Penney last week reported same-store sales fell 16.6 percent
in the first quarter, still feeling the effects of the company's
decision last year to eliminate most discounting, a strategy it
has since dropped. Kohl's is expected to report a 0.1 percent
decrease in same-store sales when it posts results on Thursday.
Among department store operators, analysts expect only
Nordstrom Inc to outperform Macy's in the first quarter.
Macy's merchandise inventory levels were up 3 percent at the
end of the quarter, roughly in line with expected sales gains,
lowering the potential damage to profit if Macy's has to
discount more than expected because shoppers pull back.
Hoguet said women's clothing and apparel aimed at teenagers
and young adults were among the company's slowest businesses,
while handbags and menswear were top performers.
Macy's posted net income of $217 million, or 55 cents share,
for the quarter that ended May 4, up from $181 million, or 43
cents per share, a year earlier, and topping analysts' average
forecast by 2 cents.
Despite the higher-than-expected profit, Macy's left its
full-year earnings forecast unchanged at $3.90 to $3.95 a share
on a same-store sales rise of 3.5 percent.
The company boosted its quarterly dividend to 25 cents a
share from 20 cents and increased its share repurchase
authorization by $1.5 billion.
Smaller rival Dillard's Inc reported net sales of
$1.55 billion, slightly lower than Wall Street's $1.6 billion
projection. Sales at stores open at least a year rose 1 percent.