• Swings to Q1 profit of $23m
  • Sales up 7.2% to $5.57bn
  • Eyes market share gains

A scheme to tailor its merchandise to the needs of local markets has helped lift sales and return US department store operator Macy's to a first-quarter profit.

But the retailer says it would be "premature" to raise its full-year guidance due to the ongoing macro-economic uncertainties.

The Cincinnati based firm, which operates 850 Macy's and Bloomingdale's stores, swung to a first quarter profit of $23m or $0.05 per share, up from a loss of $88m or $0.21 per share, a year earlier.

Sales in the quarter to 1 May were up 7.2% to $5.57bn, compared with $5.2bn in the same period last year. On a same-store basis, sales were up 5.5%, while online revenues surged 34.0%.

"Our first quarter earnings were well ahead of what we originally expected," said Terry J Lundgren, chairman, president and CEO.

"While the direction of the overall economy remains unclear, we believe we are well-positioned to continue to gain market share."

The My Macy's initiative, which allows individual stores to tailor merchandise to local tastes, is "hitting its stride" Lundgren said.

There are also plans to expand both the Macy's and Bloomingdale's brands, including multichannel strategies, a smaller-format Bloomingdale's store, and a new Bloomingdale's Outlet concept.

Macy's, which increased its full-year guidance last month, expects same-store sales to grow by 3-3.5% with earnings in the range of $1.75 to $1.80 per share.