Federated Department Stores Inc. (Cincinnati) reported that its sales during the second quarter, ending July 29, 2006, totaled $5.995 billion, an increase of 65 percent compared to the same period last year. On a same-store basis, Federated's second quarter sales were up 4.6 percent.
For the year to date, Federated's sales totaled $11.925 billion, up 64 percent from total sales in the first 26 weeks of 2005. On a same-store basis, Federated's year-to-date sales were up 2.2 percent.
“We were pleased to have exceeded our earnings guidance this quarter, indicating that the Federated-May Company integration process remains solidly on track,” said Federated's chairman, president and ceo Terry Lundgren. “In particular, we are pleased with the comp store sales progress in existing Macy's and Bloomingdale's locations, which reflect our strategy beyond the nationwide Macy's brand launch beginning September 9.
“We are still in the process of transitioning the former May Company locations with significant merchandise assortment change-outs, clearance sales of discontinued inventory and remodeling activity which is disruptive to the business, and our sales performance in these stores continues to lag,” he added. “We are looking forward to getting this work behind us and returning to a more normalized pace of activity after the nameplate changes in September.”
Federated's sales and earnings for the second quarter and first half of 2006 include results of The May Department Stores Company, which was acquired Aug. 30, 2005. Sales and earnings from the company's Lord & Taylor and Bridal Group divisions, which the company intends to divest, are being treated as discontinued operations.
Based on its first-half earnings, Federated is increasing its earnings and same-store sales guidance for the second half of 2006. The company now expects same-store sales to increase by 3 to 5 percent in each of the third and fourth quarters of 2006, compared with previous guidance of 2 to 4 percent. Federated reiterated total sales expectations of between $5.9 billion and $6.1 billion in the third quarter, and between $9.1 billion and $9.4 billion in the fourth quarter.