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Federated Guidance Optimistic

CINCINNATI-By year's end, the company expects to generate $27.25 billion to $27.75 billion in total sales.

By Dana Dubriwny | Updated on January 27, 2006

CINCINNATI-Federated Department Stores Inc. on Thursday issued guidance for the transitional year of 2006. During a conference call with investors, Karen M. Hoguet, executive vice president and chief financial officer, cautioned that last year’s merger with May Department Stores made it difficult to predict future expectations. “There are lots of moving parts, but we are still providing guidance,” she said. “Please understand that forecasting a transition year with precision is difficult.”

By year’s end, the company expects to generate $27.25 billion to $27.75 billion in total sales, with diluted earnings per share averaging $3.45 to $3.70. In the first quarter, Federated anticipates sales to post at $5.75 billion to $6.25 billion, same-store sales to drop to negative 0.5% to negative 1.5%, and diluted earnings per share to slump to negative 15 cents to negative 5 cents.

In the second quarter, the company expects to see positive growth, with total sales at $6 billion to $6.25 billion, same-store sales reaching 3% to 5%, and diluted earnings per share to rise to 45 cents to 55 cents. In the third and fourth quarters, Federated is predicting the most fruitful period since the merger, with sales generating $15 billion to $15.5 billion, same-store sales at 2% to 4%, and earnings per diluted share averaging $3 to $3.25.

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