Federated Strong After Merger
Susan Andrews -- Furniture Today, November 14, 2005
Better-than-expected results from the integration of the May Department Stores helped boost Federated Department Stores third quarter performance, despite the impact from the hurricanes.
Home was the weakest part of the business, said Karen Houget, executive vice president and chief financial officer. And cold weather merchandise business “was slower until October.”
Bloomingdale's and the Macy's Florida divisions were the strongest performers, Houget said.
Net income for the third quarter was $436 million, compared with $74 million for the same period a year ago. The earnings figure includes a one-time after-tax gain of $384 million on its credit card sale to Citigroup.
Looking ahead, Houget expects capital expenditures for 2006 to be about $1.6 billion which includes some carry-forward allocations from 2005. Capital expenditures for the year, including May, are estimated at $900 million, below what was originally budgeted, she said.
For 2007, the figure will drop to $1.1 billion to $1.2 billion and 2008 “will be potentially less.” The combined figure for 2005/2006 will be less than anticipated.
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