Friday, March 5, 2004

Federated raises sales, earnings forecasts

By Randy Tucker
The Cincinnati Enquirer

Federated Department Stores boosted first-quarter forecasts for sales and earnings Thursday after reporting a better-than-expected 9 percent jump in February sales at stores open at least a year.

The parent of Bloomingdale's, Macy's and Lazarus-Macy's attributed much of the sales surge to the demand for new spring apparel, especially men's and women's clothes aimed at professionals and office workers.

Federated also says it is rolling out a new line of career clothes from designer Tommy Hilfiger.

The new "H" line - which is more tailored and more expensive than Hilfiger's popular sportswear collection - will be launched at 94 Federated stores, including Lazarus-Macy's at Kenwood Towne Centre and the Bloomingdale's department store chain, before summer, said Jean Coggan, a Federated spokeswoman.

"It's more for our career customers as opposed to our casual customers, and it has been well received," Coggan said.

The exclusive distribution agreement with Hilfiger positions Federated to continue to capitalize on a trend that has helped revive sluggish department store sales and pushed Federated's fourth-quarter profits up 35 percent as shoppers splurged on career clothes, shoes and accessories.

Last month, the department store operator recorded total sales of $1.07 billion, an increase of 8.8 percent from sales of $984 million in the same period a year ago. Same-store sales, or sales at stores open at least a year, rose 9 percent, the company said.

The strong February led the company to increase its forecast for first-quarter same-store sales growth to a range of 4.5 percent to 6 percent. First-quarter earnings per share are now expected to be in the range of 35 cents to 40 cents, up from a previous forecast of 24 cents per share.

A number of retailers posted their best monthly performance in more than three years as sales rose 6.7 percent in February, in a year-over-year sales comparison, according to the International Council of Shopping Centers.

"Throughout February, sales continued to be strong across the majority of merchandise categories as consumer demand drove sales," said Michael Niemira, the council's chief economist and director of research. "Overall, February sales performance was the strongest since April 2000, when sales improved by 7.9 percent."


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