Federated Department Stores issues earnings report

Posted Feb 27th 2007 9:05AM by Beth Gaston Moon
Filed under: Before the Bell, Earnings Reports, Good news, Federated Dept Stores (FD)

Earnings season is winding down, which means the retailing sector takes center stage in the reporting confessional. At 8:00 a.m., Federated Department Stores Inc. (NYSE:FD) reported fourth quarter financial results: The firm's fourth-quarter sales slipped 4.3% to $9.16 billion, while same-store sales rose 6.1%. Earnings, excluding items, hit $1.66 per share, ahead of consensus analysts' expectations of $1.58 per share.

The report was accompanied by a slew of announcements:

The company is planning to change its name to "Macy's Group," citing that close to 90% of company sales come from the Macy's Brand. Don't worry about those cute little brown bags, though; FD assures that the Bloomingdale's chain remains a valuable part of the company. Shareholders will vote on the change on May 18. If approved, it will take effect on June 1.
FD will buy back up to 18% of its outstanding shares, or up to an additional $4 billion worth of stock.
The firm declared a regular quarterly dividend of 12.75 cents per share, payable April 2, to shareholders of record at the close of business on March 15.

Looking ahead to the future, the retailer targets sales of $27.1 billion to $27.6 billion in fiscal year 2007, with full-year earnings expected in a range of $2.45 to $2.60. For the first quarter, FD sees per-share earnings of 15 to 20 cents.

FD shares are slipping over 2% in pre-market trading as of 8:37 a.m.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

Tags: bloomingdale's, buybacks, dividends, fd, federated department stores, FederatedDepartmentStores, macy's, retail, same-store sales, Same-storeSales