On May 16, Federated Department Stores (NYSE:FD) released first-quarter earnings for the period ended May 5.

  • Sales were essentially flat. Management cited softness in April, particularly at new Macy's locations.
  • It's a good thing operating margins improved by 320 bps on account of lower selling, general, and administrative expenses. The company was able to get more out of those softer sales and reverse a loss in the previous year's quarter.
  • For Q2, the company expects sales in the range of $6.0 billion-$6.1 billion, while same-store sales are expected to be up by 2%.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$5,921

$5,930

(0.2%)

Net Profit*

$52

($74)

N/A

EPS*

$0.11

($0.13)

N/A

Diluted Shares

476.4

558.0

(14.6%)

*Includes income from continued operations.

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

39.8%

38.8%

1.0

Operating Margin

3.5%

0.3%

3.2

Net Margin**

0.9%

(1.3%)

2.1

*Expressed in percentage points.
**Continued operations.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$500

$241

107.5%

Accounts Rec.

$504

$2,300

(78.1%)

Inventory

$5,499

$5,432

1.2%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable*

$4,694

$5,154

(8.9%)

Long-Term Debt

$9,425

$8,837

6.7%

*Includes accrued liabilities.

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.*

($370)

($114)

N/A

Capital Expenditures

$32

$84

(61.9%)

Free Cash Flow

($402)

($198)

N/A

*Continuing operations.

Free cash flow is a Fool's best friend.

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Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean. This data has been provided by Netscribes. To provide feedback on this article, please click on the "feedback" button below.