Federated quarterly profit rises
Larry Thomas -- Furniture Today, February 27, 2007
Cincinnati – Despite lower than expected fourth-quarter sales, Federated Department Stores exceeded profit and cash flow expectations, the company reported today.
In a conference call with analysts, cfo Karen Hogue said sales were above-plan at legacy Macy’s stores, while former May doors were weaker than expected. Hogue described Bloomingdale’s performance as “great.”
Federated is cautiously optimistic about meeting its 2007 goals, which depend heavily on converted May stores coming up to Macy’s performance levels. Hogue acknowledged that former May associates are still getting accustomed to Macy’s systems. She also described retaining May customers as “probably the most challenging of all the issues we face.”
The fall rollout of the exclusive Martha Stewart home collection this fall will increase the home department’s penetration as it will put Macy’s into some new product categories such as outdoor entertainment and holiday-specific food preparation.
Federated reported EPS from continuing operations of $1.45 for the quarter ended Feb. 3 vs. $1.22 in the year-ago period.
Sales totaled $9.159 billion, down 4.3 percent in part because Federated operates approximately 80 fewer stores than in last year’s fourth quarter. Comps rose 6.1%, but that figure does not include comps from the former May units. Comps from those doors will integrate into Federated results in the newly begun fiscal year.
Fiscal 2006 sales totaled $26.970 billion, up 20.5%, with a 4.4%bump in comps. Earnings per share for the year came in at $1.80 vs. $3.16 last year.Excluding costs related to the May merger and a gain on credit card receivables, EPS was $2.30.
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