Federated Department Stores
posted a jump in first-quarter earnings Wednesday, helped by solid sales.
Citing the stronger economy, the company upped its full-year 2004 sales and earnings forecast.
The department store operator earned $96 million, or 52 cents a share, in the quarter ended May 1, compared with $56 million, or 24 cents a share, in the year-earlier period. Analysts were expecting 48 cents a share.
"The economy has improved and our customers are responding to our ongoing efforts to improve the shopping experience, as well as to our merchandising, pricing and marketing strategies," the company said in a statement.
Shares of Cincinnati-based Federated were moving up 20 cents, or 0.4%, to $47 in premarket trading.
Both total sales and same-store sales in the quarter rose 6.9%. Total sales were $3.52 billion, up from $3.29 billion in the same quarter last year. Operating income rose to $216 million from $146 million a year ago.
In 2004, Federated expects to have costs of about $40 million related to its home-store centralization program, in addition to markdowns on discontinued home-merchandise lines of $30 million. The company said in February that it is consolidating its home-store operations for all Macy's-brand department stores.
In the second quarter, the company sees earnings of 57 cents to 62 cents a share, including home-store consolidation expenses.
Full-year 2004 earnings are seen at $3.80 to $3.90 a share, also including home store consolidation costs. Backing out the expenses, the company said it expects to earn $4.04 to $4.14 a share, up from previous guidance of $3.90 to $4 a share.
The Wall Street consensus is for 72 cents a share in the second quarter and $4.07 a share in the year.