Macy’s says earnings hurt by winter weather


FORTUNE — Macy’s Inc.’s (M) fiscal first-quarter sales dropped 1.7% as poor winter weather hurt demand early in the year, though the department-store retailer affirmed its full-year targets and approved some shareholder-friendly measures.

The company on Wednesday said it boosted its dividend by 25% and authorized $1.5 billion in share repurchases.

“Overall, business trends were soft in January through March, with the exception of the Valentine’s Day shopping period,” said Macy’s chief executive Terry J. Lundgren.

Macy’s overall sales dropped 1.7% to $6.28 billion for the quarter ended May 3, while same-store sales slid 1.6%.

MORE: Retail sales slowed significantly in April

Though results were hurt by the poor weather, as well as the timing of the retailer’s popular Friends & Family promotion, Macy’s said trends improved in April.

“We see this as a good sign moving forward into the second quarter,” Lundren said.

Despite the weather issues in the first quarter, Macy’s still expects same-store sales to rise between 2.5% to 3% for the full fiscal year and also affirmed its profit target for the period.

MORE:Banks inside Wal-Mart stores rake in high fees

Macy’s, which last year tested a “buy online, pickup in store” concept, is planning to roll out that offering to all stores during the spring season. The retailer has also sought to notch more mobile transactions and ship from stores to fulfill online orders — aspects of the company’s omnichannel effort.

Earlier this year, Macy’s laid off about 1,800 employees, part of a plan to cut costs and generate $100 million in annual savings. That move helped the company issue an upbeat profit outlook for the new fiscal year. Overhead costs slightly declined in the first quarter from a year ago.

Overall, Macy’s reported first-quarter net income of $224 million, or 60 cents a share, up from $217 million, or 55 cents a share, a year earlier. Gross margin grew to 38.9% from 38.8%.

Retailers Wal-Mart Stores Inc. (WMT), J.C. Penney Co. (JCP), and Kohl’s Corp. (KSS) are set to release their latest quarterly results on Thursday.

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