CHICAGO – Federated Department Stores Inc. (FD), parent of Macy's (search) and Bloomingdale's (search), on Wednesday posted a better-than-expected 27 percent jump in quarterly profit, helped by strong spring clothing sales.
The Cincinnati-based department store operator said it was "more enthusiastic than ever" about its planned $11 billion takeover of May Department Stores Co. (MAY), which it still expects to close in the third quarter.
May Department Stores (search) on Tuesday reported weaker-than-expected profit because of poor demand for its private label clothing, but analysts said the disappointing performance would not hinder the Federated deal.
Federated Department Stores (search) earned $123 million, or 71 cents per share, in the first quarter ended April 30, compared with $97 million, or 53 cents per share, a year earlier.
Shares of Federated rose 1.4 percent in early New York Stock Exchange (search) trading.
The earnings beat the company's increased forecast for 65 cents to 70 cents per share, and Wall Street expectations for 68 cents per share on average, according to Reuters Estimates.
Quarterly sales climbed 2.5 percent to $3.6 billion, while sales at stores open at least a year — a key retail measure known as same-store sales — rose 2.6 percent.
Federated forecast second-quarter profit of 80 cents to 85 cents per share, in line with Wall Street expectations for 82 cents per share.
The retailer said it would not update its second-half forecast until it decides what to do with its credit business and determines when the May deal will close.
Shares of Federated rose 88 cents to $64.78 on the NYSE.