Macy’s Inc (NYSE:M) shares are trading higher after the company reported better-than-expected first-quarter adjusted EPS and raised the outlook.

The company reported a first-quarter FY24 sales decline of 2.7% year-on-year to $4.846 billion, slightly missing the analyst consensus of $4.86 billion.

Comparable sales decreased 1.2% on an owned basis and down 0.3% on an owned plus licensed basis. First 50 locations comparable sales, included within go-forward locations comparable sales, gained 3.3% on an owned basis and grew 3.4% on an owned-plus-licensed basis.

The operating margin was 2.5% versus 4.7% last year. Operating income for the quarter declined 48.8% to $125 million.

The gross margin was 39.2%, down 80 basis points from the first quarter of 2023. Adjusted EBITDA was $364 million versus $468 million last year.

Adjusted EPS of $0.27 beat the analyst consensus of $0.15.

Macy’s held $876 million in cash and equivalents as of May 4. Operating cash flow for three months totaled $129 million. Merchandise inventories were up 1.7% versus the first quarter of 2023.

“We are encouraged by our customers’ response to our Bold New Chapter strategy resulting in sales near the high end of our outlook,” said chairman and CEO Tony Spring.

Macy’s regular quarterly dividend of 17.37 cents per share is payable July 1 to shareholders of record on June 14.

Outlook: Macy’s updated FY24 sales outlook from $22.2 billion – $22.9 billion to $22.3 billion – $22.9 billion, against the consensus of $22.81 billion.

The company raised FY24 adjusted EPS guidance from $2.45 – $2.85 to $2.55 – $2.90 versus the Street view of $2.62.

Macy's currently sees FY24 comparable owned-plus-licensed-plus-marketplace sales of -1% to +1.5%.

Price Action: M shares are trading higher by 3.97% at $19.86 in premarket at the last check Tuesday.