'In spite of lower-than-expected sales, Federated (excluding the impact of the May Company merger and upcoming credit transaction) still is on track to deliver the operating income anticipated when the year began. This indicates that the core of their business is solid as they enter a period of significant change to build shareholder value for the long term,' Lundgren said.
'However, third and fourth quarter earnings for the merged company are difficult to predict because of a number of unusual factors, such as one-time costs associated with initial phases of the May Company integration, disruption to May division organizations and purchase-related accounting adjustments. Moreover, they can have little impact on May Company's fourth quarter results because assortments and marketing had been planned prior to the acquisition.
'That being said, their best guidance for earnings from continuing operations - excluding an estimated after-tax gain of $380 million ($1.56 per share) on the planned sale of receivables in the third quarter and one-time acquisition related pre-tax costs of $50 million to $100 million ($.13 to $.25 per share) in the third quarter and $100 million to $150 million ($.22 to $.33 per share) in the fourth quarter - is $0.20 to $0.25 per share for the third quarter and $2.35 to $2.45 per share for the fourth quarter.
Federated, with corporate offices in Cincinnati and New York, is one of the nation's premier retailers, with 2004 sales of more than $15.6 billion. With the May Company's 487 department stores and 710 bridal and formalwear stores in 47 states, the district of Columbia and Puerto Rico.
Federated operates nearly 950 department stores and more than 700 bridal and formalwear stores in 49 states, the District of Columbia, Guam and Puerto Rico under the names of Macy's, Bloomingdale's, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, Lord & Taylor, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, The Jones Store, David's Bridal, After Hours Formalwear and Priscilla of Boston.
Federated Department Stores Inc
marketing@alchempro.com
