Federated Reports $5.9 Billion in 1st Quarter Sales

May 17, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on May 2007 Federated Department Stores Inc., Cincinnati, reported first-quarter 2007 sales of 5.9 billion, a decrease of 0.2 percent from the same period last year. Net income for the 13-week period, which ended May 5, of $36 million was a big improvement over first-quarter 2006’s loss of $52 million. The prior-year period also included 13 weeks of business.

First quarter 2007 included merger integration costs of $36 million, or 5 cents per diluted share.

“Sales in the quarter were soft, particularly in April. For the quarter as a whole, we were pleased with sales in the legacy Macy’s and Bloomingdale’s stores,” said Terry J. Lundgren, Federated’s chairman, president and chief executive officer. “However, sales in the new Macy’s locations were disappointing in the quarter. In spite of weak sales, we achieved strong gross margin results and reduction in expense as a percent to sales. We are on track to deliver at least $450 million in annual expense savings as a result of the May Company acquisition. While April has given us some concern about the consumer and the economic environment, we remain optimistic that our trends will improve particularly in the back half of the year as we reach the first anniversary of the Macy’s brand conversion.”

Looking ahead, Federated reiterated its full-year 2007 earnings guidance of $2.45 to $2.60 per diluted share from continuing operations, excluding merger integration costs. Federated’s guidance is for total sales of $6.0 billion to $6.1 billion in the second quarter, compared with previous guidance of $6.1 billion to $6.2 billion.

Federated operates more than 850 department stores in 45 states, the District of Columbia, Guam and Puerto Rico under the names of Macy’s and Bloomingdale’s.