Federated Department Stores, Inc. reported total sales of $814 million for the four weeks ended January 31, 2004, an increase in total sales of 5.1% compared to total sales of $775 million in the same period last year. On a same-store basis, Federated's January sales were up 5.5%. This compares to an expected range of up 1% to down 1% for the period.
For the 13-week fourth quarter, Federated's sales totaled $5.054 billion, an increase of 0.7 percent compared to total sales of $5.017 billion in the same period last year. On a same-store basis, Federated's fourth quarter sales were up 1.4 percent.
Federated's sales for fiscal 2003 totaled $15.265 billion, down 1.1% from total sales of $15.435 billion last year. On a same-store basis, Federated's annual sales were down 0.9%.
Terry J. Lundgren, Federated's chairman/ceo and president, said the company was very pleased with its January sales. “We saw improvement across all merchandise categories and all parts of the country, driven by a continued comeback in career apparel and accessories. While January is a clearance month, we believe the recent trend bodes well for the coming year,” Lundgren said.
Fourth Quarter and 2004 Earnings Guidance
The company increased its fourth quarter earnings guidance to $2.25 to $2.27 a share, excluding the impact of a one-time $38 million reduction in net deferred income tax liabilities as a result of anticipated lower effective income tax rates in the future. Including the effect of this one-time tax adjustment, which will increase earnings per share in the fourth quarter of 2003 by approximately 20 cents, the company expects fourth quarter earnings of $2.45 to $2.47 a share. For the fiscal year, Federated increased its 2003 annual earnings guidance to $3.47 to $3.49 a share, excluding the effect of the tax adjustment. Including the effect of the one-time tax adjustment, annual earnings are expected to be $3.67 to $3.69 a share.
Looking ahead to fiscal 2004, Lundgren said Federated expects same-store sales for the year to increase 1.5 to 2 percent — up 2 to 2.5 percent in the first quarter (including an expectation for February of up 2 to 3 percent), up 1 to 1.5 percent in the second quarter and up 1.5 to 2 percent in the second half of the fiscal year. Earnings per share are expected to be $3.70 to $3.80 for the year on a diluted basis, although the company expects earnings per share to be relatively flat with 2003 earnings in the first two quarters of the new fiscal year. The tax rate for 2004 is expected to be 38.4 percent.
