Profits at Macy’s Inc. are up 20% in the first quarter, despite weak spending trends among middle-income shoppers. Tightened budgets and a late, long winter put a damper on spring spending at both Macy’s and the upscale Bloomingdale’s, which is also operated by Macy’s Inc.
Chairman, President, and CEO Terry Lundgren said in a statement that Macy’s is pleased with their first-quarter performance, “given the challenges we overcame in this period.” He credited Macy’s targeted approach to merchandise, which is tailored to each store location, and celebrity tie-ins with stars like Madonna, Jessica Simpson, and Donald Trump.
Lundgren did not mention competitor J.C Penney in his statement, but analysts noted have that Penney’s pain is Macy’s gain. The troubled Penney is set to report its fifth consecutive quarter of falling sales, as it struggles to undo the damage caused by ousted CEO Ron Johnson.
Macy’s Inc. reported earnings of $217 million in the first quarter, up 20% from the $181 million in the first quarter of 2012, and revenues of $6.38 billion, up 4%. The numbers fell slightly short of analysts expectations, but investors were apparently undaunted. In premarket trading, shares in the company rose over 2%, to $48.41 per share.