NEW YORK (TheStreet) -- Macy's (M) shares were rising Wednesday on strong volume after the department store kicked off first-quarter earnings reports with better-than-expected earnings and announced a dividend increase.
The Cincinnati-based company said net income was $217 million for the 13-week quarter, or 55 cents per diluted share versus $181 million, or 43 cents in the same period last year. Analysts on average expected Macy's to post quarterly earnings of 53 cents a share.
First-quarter sales for the period totaled $6.39 billion, up 4% from the same period last year. Comparable stores sales, which includes stores open at least one year as well as e-commerce sales form Macys.com and Bloomingdales.com, rose by 3.8% from the first quarter last year, Macy's said.
Macy's stock jumped 3.2% shortly after the stock markets opened. The stock has since retreated, but still in positive territory, up 1% to $47.89. More than 5 million shares had already traded hands -- surpassing the stock's average daily trading.
Macy's said based on the positive momentum in its 840-store and online businesses as well as its "confidence in our future performance," it was raising its common stock dividend by 25% -- its third increase in the dividend in two years -- and authorizing a $1.5 billion increase in its share repurchase authorization. "The first quarter demonstrated our ability to continue to build on our success over the past few years in growing sales and earnings," Macy's chairman, president and CEO Terry J. Lundgren, said in the earnings release. Macy's was able to deliver the earnings beat despite the cool spring weather, particularly in the Northeast -- a factor that other retailers, including JC Penney (JCP) and Target (TGT) have already warned would hinder quarterly sales.
Still Lundgren noted that Macy's saw consumer weakness in the quarter "among some of the most budget-conscious consumers, as well as among our higher household income Bloomingdale's customers." "We are continuing to pursue myriad new growth opportunities within our time-tested M.O.M. strategies (My Macy's, Omnichannel and Magic Selling). These strategies continue to work individually -- and in unison -- at Macy's to meet the needs of customers seeking fashion, quality, value and convenience," Lundgren said.
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