Macy’s, Inc. reported earnings of 60 cents per diluted share for the first quarter of 2014, the 13-week period ended May 3, 2014, an increase of 9 percent compared with earnings of 55 cents per diluted share in the first quarter of 2013. Based on expectations for continued strong performance in 2014, 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.

“Overall, business trends were soft in January through March, with the exception of the Valentine’s Day shopping period. The trend improved in April when the weather began to turn in northern climate zones. We see this as a good sign moving forward into the second quarter. In addition to weather, first quarter comparisons were negatively impacted by a calendar shift for our popular Friends & Family event and the fact that we were up against a very strong first quarter last year,” said Terry J. Lundgren, Macy’s, Inc. chairman and chief executive officer.

“We continue to have a positive outlook for 2014 and are reaffirming the full-year guidance we provided in January. The fundamentals of our business and our ongoing strategies remain strong. This, combined with the momentum we have built over the past five years, leads us to feel confident about the company’s prospects. Our Board shares this confidence and increased our dividend and share repurchase authorization to provide an even greater return for our shareholders,” Lundgren said.

Sales

Sales in the first quarter of 2014 totaled $6.279 billion, a decrease of 1.7 percent, compared with sales of $6.387 billion in the same period last year. On a comparable sales basis, Macy’s, Inc.’s first quarter sales were down 1.6 percent in 2014 compared with 2013. Together with sales from departments licensed to third parties, first quarter 2014 sales on a comparable basis were down 0.8 percent.

Please see the last page of this news release for important information regarding the calculation of the company’s comparable sales and comparable sales together with comparable sales from departments licensed to third parties.

In the first quarter of 2014, Macy’s consolidated two stores in the same mall in Houston, TX, into one location as part of a mall redevelopment project.

Operating Income

Macy’s, Inc.’s operating income totaled $443 million or 7.1 percent of sales for the first quarter of 2014, compared with $435 million or 6.8 percent of sales for the same period in 2013. This represents a 30 basis point increase in operating income as percent to sales.

Cash Flow

Net cash provided by operating activities was $86 million in the first quarter of 2014, compared with $298 million in the first quarter last year. Net cash used by investing activities in the first quarter of 2014 was $96 million, compared with $107 million a year ago. Net cash used by financing activities in the first quarter of 2014 was $385 million, compared with $275 million last year.

The company repurchased approximately 7.4 million shares of its common stock for a total of approximately $432 million in the first quarter of 2014.

Dividend Increase

Macy’s, Inc.’s board of directors has authorized an increase in the quarterly dividend on Macy's common stock to 31.25 cents per share from the current 25 cents per share. The new dividend will be payable July 1, 2014, to shareholders of record at the close of business on June 13, 2014.

This represents the fourth increase in the dividend in the past three years. Over that period, the quarterly dividend has increased more than six-fold from 5 cents per share to 31.25 cents per share.

Increased Share Repurchase Authorization

The board also has increased the company’s share repurchase authorization by $1.5 billion. This brings the remaining authorization outstanding, as of the end of the first quarter on May 3, 2014, after giving effect to this increase, to approximately $2.5 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, Macy’s, Inc. had bought back approximately 93 million shares for approximately $3.9 billion through May 3, 2014.

Looking Ahead

The company continues to expect comparable sales growth in fiscal 2014 in the range of 2.5 percent to 3 percent. The company also reiterated its guidance for earnings per diluted share in fiscal 2014 of $4.40 to $4.50.

Macy’s, Inc., with corporate offices in Cincinnati and New York, is one of the nation’s premier retailers, with fiscal 2013 sales of $27.931 billion. The company operates about 840 stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s, as well as the macys.com and bloomingdales.com websites. The company also operates 13 Bloomingdale’s Outlet stores.