Fourth-quarter earnings at Federated Department Stores (FD) rose 29%, excluding a tax adjustment, despite virtually flat sales.

The retailer earned $460 million, or $2.50 a share, in the quarter on $5.05 billion in sales. Without a $38 million tax credit, the company would have earned $2.29 a share.

In the year-ago period, Federated earned $341 million, or $1.78 a share, on sales of $5.02 billion.

Analysts surveyed by MultexNet were expecting earnings of $2.26 a share on sales of $5.05 billion.

For fiscal 2004, the department store company expects to earn $3.70 to $3.80 a share on same-store sales growth of 1.5% to 2%. Wall Street is looking for $3.80 a share in earnings on overall sales of $15.56 billion, or about 2% total sales growth.

In all of fiscal 2003, Federated earned $693 million, or $3.71 a share, on $15.26 billion in sales. Net earnings fell 10% from fiscal 2002, while sales dropped 1%.