Federated Department Stores, Inc. reported a decrease of 8.6 percent in same-store sales for the five weeks of December that ended January 5, 2002. Total December sales of $3.004 billion represent a decrease of 8.7 percent versus sales of $3.291 billion for the comparable period last year.
For the combined nine weeks of November/December 2001, Federated's same-store sales were down 5.4 percent. On a comparable-calendar basis, Federated's same-store sales were down 0.9 percent in December and 3.6 percent in November/December. This adjusts for a shift in the retail calendar that caused the nine weeks of November/ December 2001 to start a week later than last year and then to extend into the first calendar week of January 2002. As a result, a week of higher volume early-November sales was replaced with a lower-volume January week this year.
For the 48-week year to date, Federated's same-store sales were down 5.1 percent. Year-to-date sales totaled $16.060 billion, a decrease of 7.2 percent compared to sales of $17.299 billion for the same period last year, partially reflecting the closing of Stern's and the downsizing of Fingerhut.
James M. Zimmerman, Federated's chairman and chief executive officer, said the company's sales performance in December and the combined November/ December period was stronger than anticipated. Federated had expected a same-store sales decline of 11-14 percent for December and a decline of 7-10 percent for the combined November/December period. He noted also that while the actual number of transactions in December was up this year, the average dollar amounts of those transactions, particularly in apparel areas of the business, was down.
"We were pleased with our sales performance in December and the combined November/December period, although this was driven in part by markdowns," Zimmerman said, adding that, "While these markdowns were needed to clear excess inventory, they will hurt our gross margin in the period."
Zimmerman said that excluding restructuring charges, the company still expects to produce fourth quarter earnings in the previously forecasted range of $1.85-$2.00 a share. He also noted that Federated's yearend inventories will be lower than expected, which will better position the company for the start of the new year.
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 $18 billion. Federated currently operates more than 450 stores in 34 states, Puerto Rico and Guam under the names of Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's and Rich's, as well as macys.com, Bloomingdale's By Mail and Fingerhut.
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