Federated Profit Eases Amid Sales Slowdown
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Federated Department Stores Inc., operator of Macy’s and Bullocks, reported a slight decline in profit for its fiscal first quarter as sales fell and its stores joined rivals in cutting prices to clear out merchandise. Federated said escalating energy costs and electricity shortages in California also hurt results.
Profit from operations fell to $86 million, or 42 cents a share, but topped the 36-cent average estimate of analysts polled by First Call/Thomson Financial. Sales were off 5.2% at $3.82 billion.
The company reduced this year’s budget for upgrading stores and other assets to $775 million from $850 million and said it will hold down inventory to keep annual earnings on track to meet forecasts of $4 to $4.25 a share.
Shares of Federated, whose other chains include Burdines and Rich’s, rose $2.29 to close at $46.38 on the New York Stock Exchange.
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