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Federated beats forecasts
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May 10, 2000: 9:05 a.m. ET
Owner of Macy's and Bloomingdale's posts unexpected profit gain
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NEW YORK (CNNfn) - Federated Department Stores Inc., owner of such chains as Macy's and Bloomingdale's, posted a gain in fiscal first-quarter profits Wednesday, beating forecasts of analysts who had looked for earnings to drop in the period.
The Cincinnati-based Federated posted net income of $89 million, or 41 cents a diluted share, for the quarter ended April 29, up from $87 million, or 40 cents a share, a year earlier. Analysts surveyed by earnings tracker First Call forecast the company's earnings would drop to 37 cents a share in the period.
 Federated (FD: Research, Estimates), the nation's sixth-largest retailer, said part of the gain is due to the inclusion of its direct marketing Fingerhut's unit for the full quarter, as opposed to a single month a year earlier, as well as a more than five-fold increase in online purchases by its customers. But the company's direct-to-consumer division saw operating losses rise to $23 million in the period from $2 million a year earlier.
Sales gained 12 percent to $4.0 billion from $3.6 billion a year earlier. Sales in stores open at least a year, a closely watched measure known as same-store sales, increased 2.9 percent.
Fiscal first-quarter results for other retailers have been somewhat lackluster so far, with leading retailer Wal-Mart Stores Inc. (WMT: Research, Estimates) beating forecasts by only 1 cent a share, and two other major retailers -- Kmart Corp. (KM: Research, Estimates) and Gap Inc. (GPS: Research, Estimates) -- warning investors last week they would not meet analysts' estimates for the period. Federated was one of 13 retailers whose stock was downgraded by Goldman Sachs last week, although other analysts defended the sector's prospects.
Shares of Federated slipped 1/16 to 36-3/8 in trading Tuesday. 
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