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Federated Results

From: ASAP

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Federated Department Stores, Inc. (NYSE:FD)(PCX:FD) reported total sales of $970 million for the four weeks ended August 3, 2002. This represents a decrease of 3.3 percent from total sales of $1.003 billion for the same period last year. On a same-store basis, Federated's July sales were down 5.2 percent.

For the 13-week second quarter, Federated's total sales of $3.487 billion were flat with sales of $3.488 billion in the same period last year. On a same-store basis, second quarter sales were down 2.8 percent.

For the 26-week year to date, Federated's sales totaled $6.940 billion, a decrease of 1.5 percent compared to sales of $7.044 billion for the same period last year. On a same-store basis, Federated's year-to-date sales were down 2.9 percent.

"While business has been difficult all year, there was a significant deterioration in sales during the last two weeks of July, which we think was due in part to negative economic news in that period," said James M. Zimmerman, Federated's chairman and chief executive officer. He also noted that some of the weakness in July sales was related to lower inventory levels -- down 9.7 percent in comparable stores at the end of the month -- which resulted in substantially less clearance merchandise than a year ago.

"On a positive note, improved gross margins more than offset the impact of weaker-than-anticipated sales, and as a result we expect to be reporting second quarter earnings that at least meet if not exceed the higher end of our original guidance of 50-60 cents a share," Zimmerman said.

Federated will report its fiscal 2002 second quarter earnings on August 14. A live webcast of the second quarter earnings call with analysts can be accessed on that day via www.fds.com beginning at 10:30 a.m. ET.

Federated, with corporate offices in Cincinnati and New York, is one of the nation's leading department store retailers, with annual sales of more than $15.6 billion. Federated currently operates more than 450 stores in 34 states, Guam and Puerto Rico, under the names of Macy's, Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus and Rich's. The company also operates macys.com and Bloomingdale's By Mail.

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