New York—Winter storms in much of its selling areas may have chilled its first quarter sales, but Macy’s Inc. today still managed a 3.2% increase in its profit.
For quarter ended May 3, the department store giant posted net profit of $224 million, or 60 cents a share, compared with a profit of $217 million, or 55 cents a share, in the prior-year quarter. That also beat analysts’ average estimate for 59 cents a share.
Valentine’s an Exception
Net sales decreased 1.7% to $6.28 billion from $6.39 billion in the same quarter last year, missing analysts’ consensus for $6.46 billion in sales.
Comparable store sales declined 1.6% and edged down 0.8% when combined with comparable sales from departments licensed to third parties.
Operating margin improved 30 basis points to 7.1% from last year as gross margin expended 10 basis points and selling, general and administrative expenses as a percentage of total sales declined 20 basis points.
“Overall, business trends were soft in January through March, with the exception of the Valentine’s Day shopping period. The trend improved in April when the weather began to turn in northern climate zones,” said Chairman/CEO Terry Lundgren. “We see this as a good sign moving forward into the second quarter. In addition to weather, first quarter comparisons were negatively impacted by a calendar shift for our popular Friends & Family event and the fact that we were up against a very strong first quarter last year.:
Nonetheless, Macy’s Inc. took a positive outlook for 2014, Lundgren added.
Looking ahead to fiscal 2014, Macy’s Inc. reiterated its earnings guidance in a range of $4.40 to $4.50 a share on projected comparable sales growth of 2.5% to 3%. Analysts’ consensus expects full year earnings of $4.48 a share on total sales of $28.67 billion.
Macy’s Inc. also hiked its quarterly dividend to 31.25 cents a share from 25 cents and boosted its share buyback program by $1.5 billion, to $2.5 billion.