Retailing giant Federated Department Stores Inc. reported a 10% increase in fiscal third-quarter earnings, beating Wall Street expectations as strong October sales offset a slow start to the quarter and lost business from the Florida hurricanes in August and September.
The operator of Macy’s and Bloomingdale’s department stores said Wednesday that earnings rose to $74 million, or 42 cents a share, in the quarter ended Oct. 30, from $67 million, or 36 cents, in the third quarter of 2003.
Analysts surveyed by Thomson First Call had predicted earnings of 39 cents a share.
The results included store closings, centralization and consolidation costs of $36 million in the third quarter, compared with $29 million in the year-earlier quarter.
Sales were relatively unchanged, increasing less than 0.2% to $3.49 billion.
Handbags, jewelry, cosmetics and children’s clothing sold well, and the company saw increases in men’s and women’s apparel, Chief Financial Officer Karen Hoguet said.
The company had a bump in sales in October in Florida after the hurricanes, but it was not enough to offset the losses caused by the storms at stores in the state, Hoguet said.
Sales at stores open at least a year, known as same-store sales, increased 0.4%. Same-store sales are considered the best indicator of a retailer’s health.
The company also spent $336 million to repurchase 7.4 million shares of stock in the third quarter.
Federated maintained that it would earn $2.45 to $2.55 a share in the fourth quarter. The company anticipates same-store sales for the fourth quarter to increase 1.5% to 3%.
Federated expects that November same-store sales will be up no more than 2%, and that December will benefit from having two extra pre-Christmas shopping days this year, resulting in a projected same-store sales increase of 1% to 3%.
Federated had 2003 fiscal year sales of more than $15.2 billion. It has more than 450 stores in 34 states and operates Macys.com and Bloomingdale’s by Mail.
Its shares rose 5 cents to $53.85 on the New York Stock Exchange. Federated’s share price has ranged from $42.54 to $55.06 during the last year.