Federated Department Stores total sales were $1.070 billion for the four weeks ended February 28, 2004, an increase in total sales of 8.8 percent compared to total sales of $984 million in the same period last year. On a same-store basis, Federated's February sales were up 9.0 percent.
Terry J. Lundgren, Federated's chairman, president and chief executive officer, said the company was very pleased with its February sales, which were much stronger than expected. “Part of February's exceptional performance is attributable to favorable weather comparisons between this year and last, but there also is underlying sales strength in key merchandise categories such as women's ready-to-wear, jewelry, handbags, shoes and cosmetics that is very encouraging for the spring season overall.” He added, however, that the company is still cautious about its home store sales trend, due in part to the ongoing home store reorganization.
Lundgren said the company's revised guidance for first quarter same-store sales growth is 4.5 to 6 percent. If the company achieves its plan for March-April (an increase in same-store sales of 2.5 to 3 percent), first quarter same-store sales would increase about 4.5 percent. Assuming the underlying sales trend continues, however, the company believes it could exceed that March-April plan by 1 to 1.5 percent, resulting in a first quarter same-store sales increase in the range of 5.5 to 6 percent.
Lundgren said there is no change to the company's current sales guidance for the remainder of the year. Same-store sales in that period, which will be compared to stronger periods of the prior year, are expected to be up 1 to 1.5 percent in the second quarter and 1.5 to 2 percent in the second half of the year, which constitutes the fall season.
As a result of raising first quarter same-store sales expectations, Federated is raising its first quarter earnings guidance to 35-40 cents a diluted share from its previous forecast of earnings that would be relatively flat with last year's 24 cents a diluted share. The company also is raising its annual earnings guidance for fiscal 2004 to $3.80 – $3.90 a diluted share, up from its initial guidance of $3.70 – $3.80 a diluted share.
