Federated Department Stores Inc. didn't experience a sales bonanza last year, but cost controls and merger payoffs helped the retailer post better-than-expected profits in 1996.
Including the expense of integrating the acquired Broadway Stores Inc. and R.H. Macy & Co., Federated recorded net income of $265.9 million, or $1.28 a share, for the year ended Feb. 1, the company said Tuesday. The Cincinnati retailer earned $74.6 million, or 39 cents a share, the prior fiscal year.
Its profit excluding the charges rose 68 percent, to $453.4 million, or $2.18 a share, from $268.7 million, or $1.40 a share, the previous year.
Net sales for the year advanced 1.2 percent to $15.23 billion from $15.05 billion. But sales from stores open at least a year - considered the most accurate performance measure - increased 3.1 percent.
''They're beginning now to take advantage to the fullest measure all of the economies of scales affiliated with mergers and acquisitions,'' said Kurt Barnard, publisher of the Barnard Retail Marketing Report.
Net income after charges in the fourth quarter rose 18 percent to $289.2 million, or $1.39 a share, from $244.9 million, or $1.21 a share year earlier. Before charges, income rose 16 percent to $342.5 million, or $1.65 a share, from $295 million, or $1.46 a share.
Sales declined 4 percent to $5.04 billion from $5.26 billion for the quarter. Federated Vice President Carol Sanger said sales reached expectations because they do not include revenue from 26 Broadway stores that were closed or sold in the second half of 1995. Same-store sales increased 4 percent.
Ms. Sanger said corporate goals in 1997 include improving same-store sales by 2.5 percent to 3 percent and expanding the company's private brand to represent 15-16 percent of total sales. The private-label line now represents 14 percent of sales.
