Retail exchange traded funds got a boost Wednesday from bullish earnings from Macy’s (NYSE: M) and a higher outlook from the company.
Macy’s shares jumped 8% in premarket action. The retail giant also doubled its quarterly dividend to a dime a share.
“In the first quarter, we benefitted from strong topline sales, disciplined margin and expense management, improved credit performance and lower interest expense,” said Terry J. Lundgren, Macy’s chief executive. “”Our confidence derives from our belief that we remain in the early innings of implementation of our current strategies.”
The stock is a holding in sector ETFs such as Retail HOLDRS (AMEX: RTH) and SPDR S&P Retail ETF (NYSEArca: XRT), which is up about 11% this year to outperform the S&P 500.
Sterne Agee analysts recently boosted their profit estimates for Macy’s after the company reported strong sale-store sales.
“The valuation and story of Macy’s is compelling, but we struggle to find a specific impetus for the stock to work in the short-term,” they wrote in a research note.
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