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Retailers beat 4Q forecasts
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February 23, 2000: 8:13 a.m. ET
Macy's, KBKids.com, other companies post profit, reflecting good holiday sales
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NEW YORK (CNNfn) - Major retailers continued to beat earnings estimates for what was already expected to be a strong holiday sales period. The owners of Macy's and KBKids.com were the latest to beat forecasts for their fiscal fourth quarters, which ended last month.
Both companies had better results from their brick-and-mortar stores than from their online sales efforts.
Additionally, Tandy Corp./RadioShack and Liz Claiborne Inc. also beat expectations Wednesday.
Dow components Wal-Mart Stores Inc. and Home Depot Inc. have already beaten estimates for the period, which showed strong gains in overall and same-store sales.
The strong results from the holiday season have spilled over into the new year as year-over-year chain store sales rose 3.6 percent during the week ended Feb. 19, according to the BTM/Schroders Weekly Sales Stores Snapshot.
Sales of hard-line goods, which included home improvement wares, appliances and office equipment - gave momentum to weekly and monthly sales, according to the survey.
Federated profits up on strong sales gain
Cincinnati-based Federated (FD: Research, Estimates), owner of such high-profile chains as Macy's and Bloomingdales, posted net income of $448 million, or $2.04 a diluted share, for the quarter ended Jan. 29. Analysts surveyed by earnings tracker First Call Corp. predicted the company to earn $1.99 a share for the period. That result is up from net income of $408 million, or $1.88 a share, in the year-earlier quarter.
The company did not break out results for its online sales efforts, but said in its statement that those results lagged behind sales from their brick-and-mortar stores.
"Our direct-to-customer business results were mixed, but we think the strategic direction initiated in 1999 has Federated well positioned to capitalize on the potential of this segment, particularly in the rapidly growing e-commerce arena," said James Zimmerman, chairman and chief executive.
Sales for the quarter rose 18.2 percent to $6.2 billion. The company said department store sales were particularly strong.
For the company's fiscal year, Federated posted net income of $795 million, or $3.62 a diluted share, compared with the previous year's earnings of $685 million, or $3.06 a diluted share, excluding one-time items. Including the one-time items, which were related to early payment of debt, the company's net income for the previous fiscal year, 1999, came to $662 million, or $1.96 a diluted share.
Revenue for the fiscal year came to $18.2 billion, up 15.1 percent, from the $15.8 billion in sales in the year-earlier period.
Online sales loss depress Consolidated profit
Consolidated Stores (CNS: Research, Estimates) lost money on its online sales efforts, causing it to miss its own earnings targets for the year. But it still reported net income of $119.3 million, or $1.06 a diluted share, for the quarter ended Jan. 29. Analysts surveyed by earnings tracker First Call predicted the company to earn $1.03 a share.
In the year-earlier quarter, the Columbus, Ohio-based company earned $118.8 million, or $1.06 a share, excluding $12.6 million in costs due to a change in accounting practices equal to 12 cents a share.
KBKids.com, the company's Internet toy sales site, incurred a loss equal to 16 cents a share in the quarter and 30 cents a share for the full year. The company announced plans last month to spin off KBKids.com as a separate company.
Sales rose 9.3 percent in the quarter to $1.8 billion. The company said sales in stores open at least two years rose 3.9 percent in the quarter and 5.6 percent for the year.
For the full fiscal year, the company posted net income of $96.1 million, or 87 cents a diluted share, compared with net income for its previous fiscal year 1999 of $109.4 million, or $1 a share, excluding one-time costs for a change in accounting practices. Including that cost, year-earlier net income was $96.7 million, or 89 cents a share.
Revenue for the year rose 12.1 percent to $4.7 billion, from $4 billion.
Revenue from closeout merchandise rose 15.2 percent for the fiscal year, while toy sales gained 7.5 percent.
Shares of Federated fell ¼ to 35-1/4 in trading Wednesday. Consolidated shares were down 1/16 to 12-1/2.
Wireless, satellite sales help Tandy Corp./RadioShack
Increased sales of wireless phones and satellite dish systems helped Tandy Corp. (TAN: Research, Estimates) beat earnings expectations by a penny.
For the fourth-quarter ended Dec. 31, 1999, the company earned $129.6 million, or 63 cents per share, compared to $196.1 million, or 51 cents per share a year earlier. Analysts surveyed by First Call/Thomson Financial forecast earnings of 62 cents per share.
Wireless phone sales at the Fort Worth, Texas-based electronics retailer's RadioShack stores increased 57 percent to 3.3 million units for the 1999 calendar year. Sales of satellite dish systems increased 79 percent to 600,000 units.
RadioShack, which earned residuals of $63 million from wireless and satellite sales, expects that number to reach $92-$102 million this year.
For the full year ended Dec. 31, 1999, Tandy earned $303.8 million, or $1.46 per share, compared to $245.2 million, or $1.14 per share, a year ago.
The company expects an agreement to distribute Thomson/RCA digital devices this year to further bolster sales along with an agreement with Microsoft that will allow RadioShack to provide high-speed demonstration, sell and install Mircrosoft Internet Services, and other products. A Microsoft Internet Center, store-within-a-store will also be introduced.
Last year, Tandy acquired AmeriLink, one of the largest U.S. installation companies, which it plans to use to make home installation of electronics products available to consumers nationwide.
Shares of Tandy were down 2-7/8 to 39-1/4 late Wednesday morning.
Marketing, stock repurchase, boost Liz Claiborne Inc.
Clothing designer and manufacturer Liz Claiborne Inc. also beat Wall Street expectations Wednesday, announcing fourth-quarter earnings of $76.2 million, or 85 cents per share, compared to $46.9 million, or 73 cents per share a year ago.
The New York City-based top U.S. retail clothier beat the consensus forecast of 81 cents per share of analysts surveyed by First Call/Thomson Financial.
For the 12 months ended Jan. 1, 2000, the company earned $300 million, or $3.12 cents per share, compared to $258 million, or $2.57 cents per share a year ago.
Net sales for the quarter reached $677.1 million, 11 percent more than a year ago.
For the 12 months ended Jan. 1, 2000, the company reported net sales of $2.8 billion, a 10.7 percent increase over the $2.5 billion for the same period the year before.
Paul R. Charron, Liz Claiborne's (LIZ: Research, Estimates) chairman and chief executive officer, attributed the growth to the company's "multi-brand, multi-channel strategy," as well as the repurchase of about $281 million, or 7.4 million shares of common stock in 1999.
Liz Claiborne shares were up 5/16 to 34-5/16. 
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