CINCINNATI -- Boosted by better-than-expected sales and expense controls, Federated Department Stores reported earnings before a special item rose 38.9 percent in the fourth quarter.
For the period ended Jan. 29, earnings before special charges totaled $146 million, or $1.16 a share, against $105.1 million a year earlier. A $6.1 million charge for early repayment of debt reduced year-ago net income to $99 million, or 78 cents a share.
Operating income advanced 29.1 percent, to $287.6 million from $222.9 million. In the latest quarter, operating expenses were reduced by $24 million, or 11 cents a share, from favorable settlements of disputed bankruptcy claims.
Sales in the quarter inched up 3.8 percent, to $2.34 billion from $2.26 billion, and comparable-store sales were up 2.1 percent.
Allen Questrom, chairman and chief executive officer, said fourth-quarter earnings, sales and expense controls beat plan, offsetting lower gross margins from lower pricing.
Peter Schaeffer, an analyst at Johnson Redbook Service, said Federated's earnings per share excluding special items came in about 10 cents higher than Wall Street's expectations. Schaeffer cited expense controls and cost cutting as contributing to the successful quarter, but noted "going into 1994, the company said it will be tough to get expenses much lower."
He's projecting earnings of $1.65 per share for 1994.
As for whether acquiring Macy's would be the key to boosting Federated's sales, Schaeffer said the combined companies would do more business and have a large degree of power over prices in the department store market, but noted, "right now, there are too many unknowns."
In the year, earnings before special items rose 48.3 percent, to $196.8 million from $132.7 million. Operating income was up 23.7 percent to $531.9 million from $429.9 million.
Net income in the latest year after a $3.5 million charge for early debt repayment was $193.2 million, or $1.53. A year earlier, net after a $19.7 million debt repayment charge was $113 million, or $1.01.
Sales in the year rose 2.1 percent, to $7.2 billion from $7.1 billion, with comparable-store sales up 1.9 percent.
Federated currently operates 219 stores in 26 states.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye