Federated Department Stores Inc.'s fiscal second-quarter earnings increased 72 percent as it recovered from heavy year-ago losses in its Fingerhut credit unit, the company said yesterday.
However, the company lowered its full-year earnings guidance.
The parent of Macy's and Bloomingdale's reported that net income for the quarter, which ended Aug. 4, increased to $110 million, or 55 cents per share, from $63 million, or 30 cents per share, last year. During the year-ago quarter, the company was battered by credit card delinquencies in its Fingerhut catalog unit.
Excluding charges related to the closure of Stern's department stores and its acquisition of the Liberty House chain, the company earned $86 million, or 43 cents per diluted share.
Analysts had estimated Federated's second-quarter earnings to be in the range of 39 cents to 49 cents per share, with a mean at 43 cents, according to Thomson Financial/First Call.
Federated, Cincinnati, reduced its second-quarter outlook last month because of poor performance at its department stores, which it attributed to the economy. The company said it expected to earn 40 cents to 50 cents per share, excluding restructuring charges. This was reduced from a prior projection of 70 cents to 75 cents per share.
Federated said difficult times are likely to continue and estimated that its full-year earnings, excluding charges, will range from $3.60 to $3.80 per share, down from its previous forecast of $3.60 to $3.90 per share.
Analysts on average had expected a profit of $3.55 per share, with estimates ranging from $3.21 to $3.89, according to First Call.
During the third quarter, the company projects earnings per share of 50 cents to 60 cents and fourth-quarter earnings of $2.20 to $2.35 per share. Analysts on average had expected third-quarter earnings of 55 cents per share and fourth-quarter earnings of $2.17 per share, according to First Call.