Cincinnati, Federated Department Stores said it expects to post a loss in the fiscal first quarter amid weaker sales in existing stores. The company projects a loss of 5? to 15 cents per share in the quarter, on sales of between $5.75 billion to $6 billion. Same-store sales are expected to decline between half a percent to 1.5%.
Federated said it expects fiscal 2006 sales of $27.25 billion to $27.75 billion, with the largest portion coming in the second half of the year. Full-year same-store sales are expected to rise from 2% to 3%.
“The integration of Federated and May Company is on track and we are optimistic about the success of Macy’s and Bloomingdale’s a national brands,” said Federated CEO Terry Lundgren said in a statement. “Forecasting for 2006 with precision is particularly challenging because of the number of variables related to the integration. While 2006 is a transition year, we expect significant improvement in 2007 and a return to our historical peak levels of profitability, adjusted for the impact of the sale of credit portfolios, by the 2008-2009 period.”
Three new stores are planned to open in 2006, including a Bloomingdale’s in downtown San Francisco. The chain has budgeted capital expenditures at $1.6 billion for the year, followed by $1.1 billion to $1.2 billion in subsequent years.
Federated’s Bridal Group and Lord & Taylor divisions, which the company intends to divest, are being treated as discontinued operations. They are excluded from sales and earnings guidance.