Federated Ups Earnings
GDA Staff -- Gifts & Dec, August 15, 2005
Federated Department Stores, Inc. reported that, due to charges last year skewing a comparison, diluted earnings per share for the second quarter rose 95 percent, increasing from 43 cents per share to 84 cents per share.
Last year's second quarter was diminished by charges of $59 million — the result of one-time costs related to Federated's repurchase of $274 million of its long-term debt. Without the charges, the company's diluted earnings per share in the second quarter last year would have been 63 cents. But even if that were the case, earnings would still have increased 33 percent.
Terry Lundgren, Federated's chairman, president and CEO, said the company was pleased with its performance. Sales growth, he said, is expected to accelerate in the second half of the year as Federated continues implementation of its improvement strategies.
“We look forward to completing two important transactions in the third quarter — our merger with The May Department Stores Company, and the sale of Federated's owned proprietary and Visa credit receivables to Citigroup,” Lundgren said. “This will represent the beginning of a new era for our company, and a period of positive long-term change that we believe will benefit our customers, employees and shareholders.
“In the short-term, however, we are firmly focused on serving customers and delivering results through the holiday selling season. We have been careful not to disrupt or distract the Federated or May organizations so they can remain committed to achieving plans for the third and fourth quarters.”
Federated Department Stores, Inc.
|Qtr. 7/30 (x000)||2005||2004||% change|
|a. For the 13 and 26 weeks ended July 31, 2004, store closing and consolidation costs and Macy's home store centralization costs amounted to $.11 and $.17 per diluted share, respectively.
b. For the 13 weeks ended July 31, 2004, selling, general and administrative (“SG&A”) expenses include $18 million of costs incurred in connection with the Macy's home store centralization, the Burdines-Macy's consolidation and other store closings. For the 26 weeks ended July 31, 2004, SG&A expenses include $33 million of costs incurred in connection with the Macy's home store centralization, the Burdines-Macy's consolidation and other store closings.
|Oper. Income (EBIT)||291||245||18.8|
|Per Share (diluted) a||0.84||0.43||95.0|
|Average Gross Margin||41.3%||41%|
|SG&A Expenses b||33.3%||34.2%||—|
|26 weeks ended 7/30 (x000)||2005||2004||% change|
|Oper. Income (EBIT)||543||462||17.5|
|Per Share (diluted) a||1.56||0.96||62.5|
|Average Gross Margin||40.8%||40.6%||—|
|SG&A Expenses b||33.3%||34.1%||—|
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