Being a bargain hunter, I had given up shopping at department stores in favor of discount retailers. However, now that I'm older and a little wiser, I can see that the department store experience has its merit.
The retailing industry has niche markets that have created a vast shopping landscape. The upscale market is served by such department stores as Saks
Federated's second-quarter earnings of $0.63 per share (if you take out the $0.20 a share of one-time, long-term debt repurchase costs) came in slightly ahead of its expectations of $0.57 to $0.62 per share. The company expects a 1.5% to 3% increase in same-store sales in the second half of 2004, which should lead to 3% to 4% same-store sales growth for the full fiscal year. Management also forecasted slightly higher earnings for 2004 than previously expected. Excluding costs associated with the long-term debt purchase, earnings are expected to be in the range of $3.90 to $4.00 per share from the previous expectation of $3.80 to $3.90 per share.
If you scan the July same-store sales for the retailing industry, a few trends become evident. Upper-crust department stores did quite well, with gains of 16.6% at Neiman Marcus, 6% at Nordstrom, 3.7% at Federated, and 5.5% at Saks. Some specialty retailers struggled through the summer doldrums, with losses of 5% at Gap, 2.1% at Ann Taylor
Federated has leveraged its retail experience into one of the more solid companies in the industry. I see May Department Stores'
Where do you shop? Log on to the Federated discussion board and share your experiences.
Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.
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