Federated leaps, home lags
CINCINNATI - Profits at Federated Department Store jumped ahead 34 percent during the first quarter - but no thanks to home.
Comps were weakest among furniture, bedding and rugs, according to Karen Hogue, chief financial officer. Overall comps rose 2.6 percent for the quarter ended April 30, while total revenue increased a modest 2.5 percent to $3.6 billion.
During a call with analysts earlier today, Hogue noted the company has said since last year that it doesn't expect the full impact of its consolidated Macy's Home organization to kick in until fall 2005. As for the merchandising impact of the merged Federated/May buying organizations, Hogue predicted change would not be evident until fall 2006.
Skewing the year-over-year profit comparison somewhat, last year's earnings were reduced by 6 cents per share to cover store closing costs and the Macy's home store consolidation. Excluding those one-time costs, earnings per share rose at a more moderate, but still strong, pace of 20.3 percent.
It wasn't enough for hungry analysts and investors. After Hogue, during the call, cautioned that an exceptionally strong first quarter would be tough to duplicate later in the year, Federated’s stock, after initially rising higher, slipped 1.7 percent, or $1.10 per share, to $62.80 from $63.90 the day before.