Macys, Inc. reported higher sales and earnings for the first quarter of 2013, the 13-week period ended May 4, 2013. Based on the ongoing momentum in our business, as well as confidence in our future performance, the company also announced a 25 percent increase in its dividend on common stock and a $1.5 billion increase in its share repurchase authorization.

Earnings for the quarter were 55 cents per diluted share, an increase of 28 percent compared with 43 cents per diluted share in the same period last year. Comparable sales grew by 3.8 percent from the first quarter last year.

The first quarter demonstrated our ability to continue to build on our success over the past few years in growing sales and earnings. Based on the effectiveness of strategies we have in place, we are confident that momentum will continue going forward, which is reflected in the actions we are announcing today to increase returns to our shareholders through an increased dividend and share repurchases, said Terry J. Lundgren, Macys, Inc. chairman, president and chief executive officer.

We are especially pleased with our first quarter sales and earnings performance given the challenges we overcame in this period. These included sustained, unseasonably cool spring weather in our northern climate zones. In addition, we saw weakness among some of the most budget-conscious consumers, as well as among our higher household income Bloomingdales customers. We are continuing to pursue myriad new growth opportunities within our time-tested M.O.M. strategies (My Macys, Omnichannel and Magic Selling). These strategies continue to work individually-and in unison-at Macys to meet the needs of customers seeking fashion, quality, value and convenience, Lundgren said.

Sales

Sales in the first quarter of 2013 totaled $6.387 billion, an increase of 4.0 percent, compared with sales of $6.143 billion in the same period last year. On a comparable sales basis, Macys, Inc.s first quarter sales were up 3.8 percent in 2013 over 2012.

Comparable sales include net sales from stores open at least one full fiscal year, as well as online sales at macys.com and bloomingdales.com.

In the first quarter of 2013, Macys opened a new store in Victorville, CA.

Operating Income

Macys, Inc.s operating income totaled $435 million or 6.8 percent of sales for the first quarter of 2013, compared with $391 million or 6.4 percent of sales for the same period in 2012.

Cash Flow

Net cash provided by operating activities was $298 million in the first quarter of 2013, compared with $265 million in the first quarter last year. Net cash used by investing activities in the first quarter of 2013 was $107 million, compared with $202 million a year ago. Net cash used by financing activities in the first quarter of 2013 was $275 million. In the first quarter of 2012, net cash used by financing activities was $999 million, including $795 million used to repay debt.

The company repurchased approximately 8.4 million shares of its common stock for a total of approximately $360 million in the first quarter of 2013.

Dividend Increase

Macys, Inc.s board of directors has authorized an increase in the quarterly dividend on Macy’s common stock to 25 cents per share from the current 20 cents per share. The new dividend will be payable July 1, 2013, to shareholders of record at the close of business on June 14, 2013.

This represents the third increase in the dividend in the past two years. Over that period, the quarterly dividend has increased five-fold from 5 cents per share to 25 cents per share.

Increased Share Repurchase Authorization

The board also has increased the companys share repurchase authorization by $1.5 billion. This brings the remaining authorization outstanding, as of the end of the first quarter on May 4, 2013, after giving effect to this increase, to approximately $2.6 billion, which the company can use to purchase common shares from time to time in the open market, in privately negotiated transactions or otherwise at any time and from time to time without prior notice.

Since resuming its share repurchase program in August 2011, Macys, Inc. had bought back approximately 60.3 million shares for approximately $2.2 billion through May 4, 2013.

Amended and Extended Credit Agreement

On May 10, 2013, the company entered into a new $1.5 billion, five-year Credit Agreement that will mature on May 10, 2018. It replaces a previous $1.5 billion facility maturing in June 2015. Given Macys, Inc.s strong results and cash flow, the company was able to improve terms in the agreement while extending the maturity.

Looking Ahead

The company continues to expect comparable sales to grow by approximately 3.5 percent in 2013. The company also reiterated its guidance for earnings per diluted share in fiscal 2013 of $3.90 to $3.95.

Macys, Inc., with corporate offices in Cincinnati and New York, is one of the nations premier retailers, with fiscal 2012 sales of $27.7 billion. The company operates about 840 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macys and Bloomingdales, as well as the macys.com and bloomingdales.com websites. The company also operates 12 Bloomingdales Outlet stores. Bloomingdales in Dubai is operated by Al Tayer Group LLC under a license agreement.