Macy's profit beats Wall Street on stronger sales
NEW YORK (AP) - Macy's reported a quarterly profit that handily beat Wall Street expectations on Wednesday, with the department store chain citing stepped up advertising for stronger sales.Its stock surged more than 7 percent in premarket trading.Macy's Inc., which is based in Cincinnati, Ohio and also operates Bloomingdale's, is the first of the major retailers to report third-quarter results and is often seen as a barometer of spending among middle- to upper-income shoppers.The company has been a standout among its peers throughout the economic recovery and has been reaping the benefits of its strategy of tailoring merchandise to local markets. But like other clothing merchants, Macy's saw sales slow over the summer amid new worries about the economy.Still, the chain said Wednesday that it saw "particular strength" in October and that it was heading into the critical holiday shopping season "with confidence." The company is already stepping up its game for the period, which can account for as much as 40 percent of a retailer's annual revenue. For the first time, it has said it plans to open on Thanksgiving evening.Rival J.C. Penney, meanwhile, is trying to recover from a botched strategy under its former CEO Ron Johnson. Under Mike Ullman, who took back the helm in April, Penney has gone back to more frequent sales events and brought back basic merchandise that Johnson eliminated.For the quarter ended Nov. 2, Macy's earned $177 million, or 47 cents per share. That compares with $145 million, or 36 cents per share, a year ago.Revenue rose 3 percent to $6.28 billion.Analysts expected earnings per share of 39 cents on revenue of $6.19 billion.Revenue at stores opened at least a year, a key metric, was up 3.5 percent, stronger than the 2.1 percent analysts expected.The company reaffirmed its guidance for sales at stores open at least a year to rise between 2 percent and 2.9 percent for the full year. Earnings are expected to be between $3.80 and $3.90 per share. Analysts expected revenue of $3.78 per share.Shares of Macy's were up $3.47, or 7.5 percent, to $49.80 in premarket trading about 45 minutes ahead of the market opening.