Macy's outlook disappoints, shares drop

Macy's, which also owns the upscale Bloomingdale's chain, reported net income of $181 million, or 43 cents a share, for the quarter that ended April 28, up 38 percent over the profit of $131 million, or 30 cents a share, a year earlier.

That was 3 cents better than what Wall Street analysts were forecasting, according to Thomson Reuters I/B/E/S. But Macy's left its full-year earnings forecast intact at $3.25 to $3.30 a share. That compared to analysts' expectations for $3.41 a share.

Macy's, which operates about 800 namesake stores as well as the Bloomingdale's stores, also said its gross margin, edged down 0.3 points to 38.8 percent of sales.

Macy's expects same-store sales to rise about 3.5 percent for the rest of this year this year .

Morningstar analyst Paul Swinand told Reuters that Macy's may have been facing pressure from rival Kohl's Corp , which lowered prices during the quarter, along with concerns about higher gas prices.

The chain showed signs of losing momentum. Same-store sales rose only 1.2 percent in April, in one of the rare times it has disappointed Wall Street of late.

As previously reported, Macy's same-store sales, or sales at stores open at least a year, were up 4.4 percent in the first quarter. Online sales rose 33.7 percent, accounting for 1.5 percentage points of the same-store sales gain.

Macy's shares were down 4 percent to $37.80 in premarket trading.

(This story was corrected to make clear in 7th paragraph that April was in first quarter)

(Reporting By Phil Wahba in New York; Editing by Gerald E. McCormick, Dave Zimmerman)