CHICAGO – Federated Department Stores Inc. , parent of Macy's and Bloomingdale's, Wednesday said its fiscal third-quarter earnings before charges fell an expectedly steep 38 percent, as consumers cut back on purchases of items like new clothing in the weak U.S. economy.
The company also repeated its outlook for the fourth quarter, which it had lowered last month in the wake of the Sept. 11 attacks on the United States, saying it expects a decline in sales at stores open at least one year of 7 percent to 10 percent.
Cincinnati, Ohio-based Ferading on the New York Stock Exchange.
"It looks as though they did a pretty good job managing through the quarter," Christine Kilton Augustine, retail analyst at ABN AMRO, said. "They are affirming the guidance for the fourth quarter. Plus with that retail sales number today, it looks like people are chasing this group."
Earlier, the U.S. Commerce Department reported total retail sales rose a record 7.1 percent in October, after falling 2.2 percent in September. Excluding autos, sales were up 1 percent.
Federated's earnings before restructuring charges and one-time items in the third quarter ended Nov. 3 were $32 million, or 17 cents a diluted share, down from $52 million, or 26 cents a share, in the same quarter a year earlier.
Twenty analysts polled by Thomson Financial/First Call on average had expected Federated to report a third-quarter profit of 15 cents a share. On Oct. 18, Federated said it expected third-quarter earnings of 13 cents to 20 cents a share.
Including items and charges, the company had net income in the third quarter of 2001 of $3 million, compared with a loss of $668 million for the third quarter of last year.
Charges in the 2001 quarter were related to the closure of the Stern's department stores and the acquisition of Hawaii-based Liberty House Inc., while year-ago items related to the restructuring of the Fingerhut catalog unit.
Federated repeated its fourth-quarter forecast of earnings before charges of $1.85 to $2.00 a share
Analysts on average expected Federated to have a fourth-quarter profit of $1.87 a share, according to First Call.
Last week, Federated said sales in the third quarter fell 10 percent to $3.775 billion from $4.195 billion, while same-store sales declined 8.6 percent.
Shares of Federated are up 10 percent since Sept. 11, underperforming the Standard and Poor's index of department stores , which is up 18 percent in the same time period.
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