Update: Federated Increases Earnings After Fingerhut PurchaseFederated Department Stores Inc., Cincinnati, reported this week that its net income jumped to $87 million for first quarter 1999, an increase of 45 percent from $60 million reported for the same period last year. The company said its diluted earnings per share were 40 cents for the first quarter of 1999, compared with 27 cents for the first quarter of 1998.
James M. Zimmerman, chairman/CEO at Federated, said the company is pleased with the sales performance and that it translates to "superior earnings in the department store segment." He also noted the company was impressed with the "excellent performance by Fingerhut in April, which was the first month that Fingerhut's results were included in our numbers."
Federated completed its $1.7 billion acquisition of the Fingerhut Companies Inc., Minnetonka, MN, on March 18.
Zimmerman said Federated's operating income in the direct-to-customer segment during the first quarter reflects the investment the company is making in Bloomingdale's By Mail, Macy's By Mail, as well as the company's growing e-commerce businesses.
The company's operating income in the first quarter of 1999 was $225 million or 6.1 percent of sales, an increase of 24 percent over operating income of $181 million or 5.2 percent of sales for the first quarter of 1998.
Fingerhut is now part of Federated Direct, the company's recently announced new division, which includes Bloomingdale's By Mail, Macy's By Mail and Macys.com. Federated Direct operations fall under the leadership of Fingerhut CEO William J. Lansing.
In addition, Richard Tate was named president of the Fingerhut Catalog last week. He was previously senior vice president of merchandising for Fingerhut Cos.
Fingerhut now handles all fulfillment and distribution for Bloomingdale's By Mail Macy's By Mail catalog and the Macys.Com e-commerce operation.