On the brink of its merger with The May Department Stores Co. (St. Louis) that will create a nationwide department store behemoth of nearly 1000 locations, Federated Department Stores Inc. (Cincinnati) has announced a 95 percent increase in diluted earnings for the second quarter of 2005.
For the first half of 2005, Federated’s earnings have increased 63 percent.
Sales were up 1.2 percent in the quarter, and same-store sales were up 1.1 percent.
Year to date, Federated’s sales are up 1.9 percent and same-store sales are up 1.8 percent.
In the quarter, the company opened one new Macy’s East store, in Wheaton, Md.
Chairman, president and ceo Terry Lundgren said the company is pleased with its performance to date in 2005. Sales growth is expected to accelerate in the second half of the year as the company continues implementation of its strategic priorities to improve assortments, pricing, the shopping experience and marketing.
“We look forward to completing two important transactions in the third quarter — our merger with The May Department Stores Co. 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.
“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 said it expects same-store sales increases of approximately 3 percent in each of the third and fourth quarters. The company does not plan to issue guidance on its third or fourth quarter earnings until after the May merger closes.
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