A cold autumn and well-timed promotions boosted
third-quarter earnings to more than twice its year-ago result and also past recently raised analyst forecasts.
The department store and drugstore chain said it earned $123 million, or 42 cents a share, in the third quarter, up from $31 million, or 9 cents a share, in the same period last year. The latest quarter includes a gain from an asset sale; excluding that, the company earned $89 million, or 30 cents a share. On that basis analysts were predicting earnings of 27 cents a share.
"Our sales momentum demonstrates that the changes in merchandise assortments, marketing, and store presentation under the centralization model are registering with the customer," the company said. Unusually cool fall weather also helped the company's clothing sales.
Total retail sales rose 1.9% to $7.87 billion, reflecting a 1.1% decline in department store and catalog sales to $4.31 billion and a 5.7% increase in drugstore sales to $3.56 billion. Within the catalog and department store segment, operating profit was $170 million, up from $148 million a year ago, on a 3.9% rise in same-store sales, although catalog sales plunged 21.2%.
Drugstore operating profit was $79 million, up from $30 million last year. store sales increased by 4.9 percent during the quarter, with pharmacy sales increasing 7.3 percent while non-pharmacy, or front-end, sales were flat.
The company affirmed expectations for earnings of 60 cents a share in the Christmas quarter; analysts polled by First Call were predicting 57 cents, on average.
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