Federated Misses Estimates

Federated Department Stores(FD) swung to a first-quarter profit but missed analysts' estimates following soft sales in April and weakness at new Macy's locations.

The company, citing uncertainty about the economic environment, also lowered the bottom end of its projected earnings range for the second quarter.

The Cincinnati-based retailing giant earned $36 million, or 8 cents a share, in the first quarter. A year earlier, the company had a loss of $52 million, or 9 cents a share, weighed down by charges from the 2005 purchase of May Department Stores.

The latest quarter included 5 cents a share in May-related charges. Excluding those costs and discontinued items, earnings were 16 cents a share.

Analysts expected a profit of 19 cents a share, according to Thomson Financial. The profit was at the low end of Federated's guidance of 15 cents to 20 cents a share.

The Macy's and Bloomingdale's owner posted sales of $5.92 billion, down slightly from $5.93 billion a year earlier. That missed Federated's forecast of $6 billion to $6.1 billion, as well as Wall Street's target of $5.99 billion.

Same-store sales, or sales at stores open at least a year, edged up 0.6%.

The company said it saw particular weakness in sales in April, as well as at sales that have been converted to the Macy's nameplate due to the May purchase.