Enter multiple symbols separated by commas

Federated Says Profit Rose 5% On Stronger Sales

Federated Department Stores, parent of Macy's and Bloomingdale's, said stronger sales at established stores and lower costs drove a 5% rise in fourth-quarter earnings.

Separately, the company said it will ask shareholders to approve a corporate name change to Macy's Group. The company also announced a $4 billion increase to its stock buyback program and said it will immediately repurchase 45 million shares for $2 billion under the plan.

For the quarter ended Feb. 3, net income rose to $733 million, or $1.40 per share, from $699 million, or $1.26 per share, in the prior-year period.

Stripping out costs related to the integration of the stores acquired in the 2005 acquisition of May Department Stores, Federated said earnings for the latest quarter were $1.66 per share, topping the company's estimate of $1.55 to $1.60 per share issued about three weeks ago. That figure includes a gain of 6 cents per share.

Analysts polled by Thomson Financial were expecting earnings of $1.58 per share. Analysts typically exclude one-time charges and gains from their estimates.

Sales fell 4% to $9.16 billion from $9.57 billion, as the company shuttered 80 "duplicative" store locations.

Analysts forecast fourth-quarter sales of $9.07 billion. The recent quarter included an extra week of sales--14 weeks versus 13 weeks a year ago.

Same-store sales, or sales at stores open at least one year, rose 6.1% in the quarter. Same-store sales are a closely watched measure of performance in the retail industry.

Over the quarter, Federated lowered its selling, general and administrative costs 11% to $2.31 billion.

Federated has been reorganizing since acquiring rival May in August 2005. In the past five months, the company has shed its Lord & Taylor division, David's Bridal and Priscilla of Boston brands. The company said about 90 percent of its sales now involve the Macy's brand.

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • Treasure hunter mel fisher and his team, circa 1985, off the Florida Keys, at discovery of a Spanish galleon sunk in 1622

    Shipwreck treasures hit the auction block

  • The end zone

    Sports are big business in this country. ESPN's Jemele Hill and Forbes Executive Editor Mike Ozanian discuss "Deflategate," NFL Commissioner Roger Goodell's battles as he deals with the NFL's future, and the fight for sports eyeballs and ratings.

  • Corona Beer

    Brewing companies are considering increasing prices on a wide range of beers.

U.S. Video