• by Sarah Mahoney  @mahoney_sarah, August 10, 2011

Amid posting its best quarterly results in more than a decade, Macy's is unleashing 10,000 wayward elves in locations around the country, with a contest meant to build excitement for the Macy's Thanksgiving Day parade.

The idea is that the retailer's Elf balloons, which have been floating down Broadway since 1947, are in desperate need of a makeover. Called Macy's Great American Elf Adventure, shoppers who locate one of the missing elves can give it an update. The winning entry will be transformed into a Macy's parade balloon on the big day. (The Cincinnati-based retailer says the parade is expected to be seen by 3.5 million live spectators, and 50 million-plus TV viewers.)

Macy's is posting daily elf-finding clues and passwords via Facebook and Twitter. (Clues are also available by text.) Once elf hunters have guessed the location, they tell a department sales associate, and get their elf, which they are then allowed to decorate. In addition to elves stashed in stores, 10 cities will host Macy's Elf-Apolooza events, including New York City, Jackson, Miss.; Los Angeles; Detroit; Greenville, S.C.; Des Moines, Iowa; El Paso, Texas, and Anchorage, Alaska.

The company also says this year it is expanding its "Backstage Pass," a customized mobile code program, with more trend and fashion videos from Macy's star designers, including Kenneth Cole, Sean "Diddy" Combs, Tommy Hilfiger, Michael Kors, Jessica Simpson and Martha Stewart. A TV spot launches next month to familiarize shoppers with the mobile technology, and Backstage Pass codes are to be prominently embedded into Macy's red star, featured throughout stores and in print advertising.

Macy's also says that its second-quarter results beat expectations, with sales reaching $5.94 billion, up 7.3%. On a same-store basis, sales climbed 6.4%.

"This was our most successful second quarter and spring season in more than a decade," Terry J. Lundgren, Macy's, Inc. chairman, president and CEO, says in the company's release. "Importantly, it came on top of an impressive first-half performance last year. To date this year, we have driven significant additional sales growth, gained market share, maintained strong margins, managed expenses and generated a very healthy level of cash."

The company raised its earnings forecast, and says it now expects same-store sales in the second half of its fiscal to be up between 4 and 4.5%, resulting in a full-year gain of between 4.8 and 5.1%.