Shares of Macy’s Inc. (NYSE:M) dipped 2 percent Wednesday after the department-store company’s quarterly profit missed Wall Street estimates and its revenue slid when compared with the same period a year ago. The firm announced a 15 percent hike in its dividend and a $1.5 billion increase in its stock-buyback program.
In its first quarter ended May 2, Macy’s net income dropped 14 percent to $193 million, or 56 cents per share, on revenue of $6.23 billion, compared with net profit of $224 million, or 60 cents per share, on sales of $6.28 billion in the same period a year ago.
Wall Street had expected Macy’s to report first-quarter net income of $212.05 million, or 64 cents per share, on revenue of $6.32 billion, according to analysts polled by Thomson Reuters.
The dividend increase, to 36 cents from 31.25 cents per share, is Macy’s fifth in the past four years. And the $1.5 billion earmarked for the company’s stock-buyback program means it is now authorized to spend $2.1 billion on share repurchases.
Retailers are in the midst of the final leg of earnings season this week, and their results are expected to show that Americans remain somewhat cautious on spending, despite cheaper gasoline prices. A steep drop in gas prices across the country was expected to boost retailers, especially those catering to middle- to low-income consumers.
However, Americans have been a bit restrained in terms of their spending, despite cheaper gas and rising confidence. Among other notable retailers reporting quarterly results this week are JC Penney Co. Inc., the Kohl’s Corp., the Ralph Lauren Corp. and Nordstrom Inc.
Also the owner of the high-end Bloomingdale’s chain, Macy’s reported in February a weaker-than-expected rise in sales during the holiday quarter, and it forecast full-year profit and revenue below analysts’ expectations as the Cincinnati company prepares to invest in international locations.
Macy’s announced in October it plans to open its first Macy’s department store and its second Bloomingdale’s outside the U.S. in a shopping center being built in the United Arab Emirates capital, Abu Dhabi. The mall is expected to open in the spring of 2018.
More recently, Macy’s announced the acquisition of the beauty-products-and-services provider Bluemercury for $210 million this year. Since February, four new Bluemercury outlets have been opened.
In terms of other outlet openings this year, the company said Wednesday it anticipates opening a Bloomingdale’s store in Honolulu; a Macy’s store in Ponce, Puerto Rico; a Bloomingdale’s Outlet store in New York; four Macy’s Backstage off-price stores in the New York metropolitan area; and 18 Bluemercury outlets in multiple locations, including the four opened in the first quarter.
Shares of Macy’s lost around 2 percent Wednesday to $64.56.