NEW YORK (AP) — Macy's Inc.'s net income surged in the third quarter as the department store chain benefited from tailoring its merchandise to local markets. The retailer also raised its full-year profit outlook Wednesday.

Macy's says it earned $139 million, or 32 cents per share, for the three months ended Oct. 29. That compares with 2 cents per share, or $10 million, in the same period last year. Revenue rose 4.1 percent to $5.85 billion.

Analysts had expected earnings of 16 cents per share on revenue of $5.87 billion, according to FactSet.

"You can feel the momentum and confidence that has been building at Macy's since our organizational changes in 2009, and especially over the past nine months," Terry J. Lundgren, chairman, president and CEO of Macy's, said in a statement. "We believe this will help us to continue to capture market share in the fourth quarter and lay the foundation for continued innovation in our business in 2012."

Lundgren also noted that at its upscale Bloomingdale's division, sales have remained strong, and customers continue to buy designer merchandise. That's a good sign that affluent shoppers are still spending despite volatile swings in the stock market.

Macy's is the first in a series of major retailers reporting third-quarter results as they head into the critical holiday shopping season, which can account for as much as 40 percent of annual revenue. Macy's has a lot of momentum going into the season.

The chain has benefited from the strategy Lundgren conceived to localize merchandise as consumer spending began slowing down in 2007. Stocking more products that cater to specific regions, like more business suits in Washington, D.C., for instance, was lacking since the chain ditched its regional nameplates such as Marshall Field's and Hecht's.

A better-trained sales force also helped. In September 2010, the company trained about 130,000 sales associates and managers on engaging customers. A big component is more intense coaching of workers by store and district management teams.

Such strategies have helped it to outperform its peers. Macy's revenue at stores opened at least a year rose 4 percent for the third quarter, and it said Wednesday it continues to expect that measure to rise anywhere from 4 percent to 4.5 percent for the current quarter.

Rival J.C. Penney Co. reported that the figure fell 1.6 percent for the third quarter. Kohl's Corp.'s saw a 2 percent increase. Kohl's is slated to reports its third-quarter results on Thursday, with J.C. Penney's due on Monday.

Revenue at stores open at least a year is an important indicator of a retailer's health because it excludes stores that recently opened or closed.

Macy's on Wednesday raised its full-year outlook to a range of $2.70 per share to $2.75 per share. The company had said in August that it had expected to earn anywhere from $2.60 per share to $2.65 per share. Analysts had projected $2.66 per share for the year.

Macy's, based in Cincinnati, operates more than 800 stores under the Macy's brand and 41 Bloomingdale's stores.