Federated Quarterly Profit Rises
Wes Kennedy -- Home Textiles Today, March 12, 2007
Despite lower than expected fourth-quarter sales, Federated Department Stores exceeded profit and cash flow expectations, the company reported in a conference call with analysts. Karen Hogue, cfo, 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 its 2007 goals, which depend heavily on converted May stores coming up to Macy's performance levels. Hogue described retaining May customers as "probably the most challenging of all the issues we face."
The rollout of the exclusive Martha Stewart Collection this fall will increase the home department's penetration, putting Macy's into product categories such as outdoor entertainment and holiday-specific food preparation.
Federated reported earnings per share (EPS) from continuing operations of $1.45 for the quarter vs. $1.22 in the year-ago period. Sales totaled $9.16 billion, down 4.3% in part because Federated operates fewer stores now. Comps rose 6.1%, not including the former May units.
Fiscal 2006 sales were $26.97 billion, up 20.5%, with a 4.4% rise in comps. EPS was $1.80 vs. $3.16 last year. Excluding merger costs and a credit-card receivables gain, EPS was $2.30.
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