For the six months of 2005, Federated reported a 63% increase in diluted earnings per share of $1.56, from 96 cents per share in the first half of 2004. Excluding costs related to the debt repurchase, diluted earnings per share for the first half of 2004 were $1.16. Sales of $3.62 billion for the second quarter of 2005 were up 1.2% over sales of $3.58 billion in the same period last year. On a same-store basis, Federated's second quarter sales were up 1.1%.

For the year to date, Federated's sales totaled $7.26 billion, an increase of 1.9% over sales of $7.13 billion in the same period last year. On a same-store basis, Federated's first-half sales were up 1.8%. In the second quarter of 2005, the company opened a new Macy's East store in Wheaton, MD. Federated expects same-store sales increases of approximately 3% in each of the third and fourth quarters. The company does not plan to issue guidance on its third or fourth quarter earnings until after the May merger closes.

The board of directors of Federated Department Stores also declared a regular quarterly dividend on Federated common stock, payable October 3, 2005. The amount and record date for the dividend will depend on when Federated's pending merger with the May Department Stores Co. closes. The company said the amount of the dividend would be 25 cents per common share if the merger occurs on or before September 15 and 13.5 cents if it closes after September 15.

Federated, with corporate offices in Cincinnati and New York, reports annual sales north of $15.6 billion. Federated operates more than 450 stores in 34 states, Guam and Puerto Rico under the names of Macy's and Bloomingdale's.