Cincinnati, OH, November 8, 2006--Federated Department Stores Inc., owner of the Macy's and Bloomingdale's chains, on Wednesday said it lost $3 million in the third quarter due mostly to costs related to its acquisition of May Department Stores. Its shares fell more than 4 percent in premarket trading.
The loss for the quarter ended Oct. 28 amounted to a penny per share compared with a profit of $436 million, or 90 cents per share, during the same period last year.
Excluding integration costs related to the May Department Stores acquisition and inventory adjustments that totaled a combined $90 million, or 17 cents per share, the company posted earnings from continuing operations of 20 cents per share in the latest period.
Last year, the company recorded a gain of $384 million, or 79 cents, on the sale of credit card receivables to Citigroup, as well as integration costs of $39 million and a settlement gain of $10 million.
Revenue grew 6 percent to $5.89 billion from $5.56 billion during the same period a year ago. On a same-store basis, sales rose 5.9 percent in the quarter.
Analysts polled by Thomson Financial forecast a profit of 25 cents per share on revenue of $5.98 billion. The earnings estimates typically exclude onetime items.
"Our third quarter earnings performance was at the high end of our expectations. On a year-to-date basis, we're ahead of our guidance," said Terry J. Lundgren, Federated's chairman, president and chief executive officer. "We continue to view 2006 as a transition year that has included a tremendous amount of change for our organization, notably a transition of more than 400 stores to the Macy's nameplate."
Its shares fell $1.84, or 4.6 percent, to $38.50 in premarket trading.
The company reiterated its fourth-quarter operating earnings guidance of $1.40 to $1.50 per share on sales of $9.1 billion to $9.4 billion. It anticipates a gain in same-store sales of 3 percent to 5 percent.
Analysts presently forecast fourth-quarter profit of $1.52 per share on revenue of $9.18 billion.
