NEW YORK (AP) — Macy's had a strong first quarter even as the department store chain faces higher costs and inflation that is chilling spending for some Americans.
The company also on Thursday raised its annual earnings outlook, pushing shares higher in premarket trading.
Like other retailers, Macy’s faces rising costs for everything from labor to shipping. It's also adjusting to changing shopping behavior as consumers go back to the office and resume normal lives. They're going out to restaurants and doing more activities while buying less stuff that focuses on activities around the home.
But Macy's performance during the first quarter was among a few bright spots among the slew of reports from other retailers. Last week, Target reported that its profit tumbled 52% from last year amid rising costs for things like fuel, and also a lightening quick return by consumers to more normalized spending. Walmart’s shares tumbled about 17% for similar reasons after it posted quarterly results. Department store chain Kohl's cut its annual earnings and sales forecast last week. And mall-based teen clothing retailer Abercrombie & Fitch posted a first-quarter loss and cut its outlook on Tuesday.
Apparently, Macy's was able to withstand the pressures.
“While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop," said Macy's CEO Jeff Gennette in a statement. “We saw a notable shift back to occasion-based apparel and in-store shopping, as well as continued strength in sales of luxury goods. “
Earlier this year, the New York company said that it would not spin off its ecommerce division from its Macy’s and Bloomingdale’s stores, rejecting a push from activist investor Jana to separate the businesses to create better value, similar to what Saks Fifth Avenue did early last year. The decision followed a comprehensive review, Macy’s said.
Macy's said that it earned $286 million, or 98 cents per share, for the three-month period ended April 30. That compares with $103 million, or 32 cents per share, for the year-ago period. Sales rose 13.5% to $5.35 billion from $4.71 billion.
Sales at stores opened at least a year rose 12.4% for the quarter. The figure includes business from licensed owned businesses like cosmetics.
Online sales rose 2%.
The company's shares rose $2.90, or a little over 15% to $22.11 in premarket trading.
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