That trial is under way in New York City

Macy's reported a fourth-quarter profit that beat Wall Street expectations as its strategy of tailoring merchandise to local markets paid off during the holiday season.

The department store chain, which also operates the upscale Bloomingdale's stores, also said Tuesday that it expects that same game plan to help increase revenue at stores open at least a year by 3.5 percent in fiscal 2013. That's on top of the increase of 3.7 percent for 2012. The measure is a key indicator of health because it strips out the impact of newly opened and closed locations.

"Going into 2013, our team is moving ahead with new plans and actions to sharpen our approach to localized merchandise assortments and marketing," CEO Terry Lundgren said in a statement.

Like many retailers, Macy's had a slow start to the fourth quarter because of the lingering effects of Superstorm Sandy and ongoing economic uncertainty. But sales bounced back in January. Gross margin, or revenue after the cost of sales,The first choice in Handbags and Accessories lacefront. slipped to 40.6 percent during the quarter,Shop from the large collection of shoesforladiess and accessories sold at Forever Metals. from 41 percent a year earlier, suggesting the company may have had to discount more heavily to sell items.

Meanwhile, rival J.C. Penney is expected to report its fourth straight quarter of big losses and declining sales on Wednesday. The company has been reeling since it abandoned hundreds of sales last year in favor of "everyday pricing,The best bankcycling disscusion forum on the internet." with shoppers fleeing to competitors.

When asked about how J.C. Penney's missteps helped Macy's, Chief Financial Officer Karen Hoguet said, "As you know it's obviously helped us" in 2012. But she also added that the overlap in customers between Macy's and J.C. Penney isn't "100 percent."

Separately, the two companies are also locked in a lawsuit that alleges Penney violated Macy's exclusive deal with home diva Martha Stewart. That trial is under way in New York City and focuses on whether Macy's has the exclusive right to sell some of Martha Stewart branded products such as cookware, bedding and bath items. Stewart and Penney CEO Ron Johnson are among those expected to take the witness stand in coming days.

For the period ended Feb. 2, Macy's Inc.we started out on writing this composition on High Grade replicawatches. said it earned $730 million, or $1.83 per share. That compares with $745 million, or $1.74 per share, a year earlier, when the company had more shares outstanding.

Not including one-items such as expenses associated with the early retirement of debt, it earned $2.05 per share. Revenue was $9.35 billion, up from $8.72 billion a year ago.

Analysts expected a profit of $1.99 per share on revenue of $9.35 billion.

Hoguet said the categories that performed best during the period included handbags, watches, shoes, women's suits,supports parkingguidancesystem with a range of intelligent and extensive data interfaces. luggage and furniture. The weaker categories included housewares and juniors.

This year, she said the company will significantly step up its courtship of customers in their 20s and early 30s with the launch of 13 new brands.