Federated Department Stores, Inc. saw December sales amount to$4.997 billion, a decrease of 8.5% from $5.459 billion in the same month last year. Total sales declined from December 2005 to December 2006, impacted by the closing of 78 duplicative store locations over the past year. On a same-store basis, Federated's sales for December were up 4.4%. This compares with the company's revised guidance for a same-store sales increase of 5% to 8% in December (initial guidance was for an increase of 3% to 5%).
For the combined November-December period, same-store sales were up 5.7% in 2006, compared with an increase of 1.1% in the same period in 2005.
For the year to date, Federated's sales totaled $25.190 billion, up 20.6% from total sales of $20.895 billion in the first 48 weeks of 2005. On a same-store basis, Federated's year-to-date sales were up 4.1%.
“While December sales were somewhat softer than expected, we overcame unseasonably warm weather in most of the country and ended the month strong. Sales results indicate that the consumer is responding favorably to the nationwide Macy's strategy and we remain confident that our future direction is sound. Particularly encouraging was the growth of online sales on macys.com, which is attracting new customers across the country,” said Terry J. Lundgren, Federated's chairman, president and chief executive officer. “Performance in former May Company stores improved in December from the October/November trend. Home merchandise categories showed continued progress in December, although the business remained weak in former May Company locations.”
Federated expects same-store sales in January to increase by 1.5% to 3%. Same-store sales for the fourth quarter as a whole are expected to increase by approximately 5%. The company expects total fourth quarter sales at the low end of its previously announced range of $9.1 billion to $9.4 billion. Sales estimates for the fourth quarter of 2006 include an extra week in January compared with 2005.
Federated's same-store sales include only legacy Macy's and Bloomingdale's locations (those operating as Macy's or Bloomingdale's prior to September 2006). Federated's total sales for December 2006 and December 2005 include the May Company acquisition, which was completed Aug. 30, 2005. For the year to date, former May Company locations are included in total sales for the entire period in 2006 but only after Aug. 30 in 2005. Sales in 2006 and 2005 from the Lord & Taylor division, which Federated sold in October 2006, and the Bridal Group division, which the company is divesting, are treated as discontinued operations.
