Three major retailers report robust third-quarter earnings
By Anne D’Innocenzio AP Business Writer
NEW YORK (AP) – Three major retailers reported robust third-quarter earnings Wednesday that narrowly beat Wall Street expectations, though they all offered a cautious holiday outlook given so much economic uncertainty.
Wal-Mart Stores Inc., fueled by strong growth in its namesake discount division, reported a 23 percent increase in third-quarter profits. Federated Department Stores, which operates Bloomingdale’s and Macy’s, said its earnings soared to $106 million in the quarter from $3 million a year ago.
Tiffany & Co. announced a 46 percent jump in earnings, as sales rose 10 percent and the upscale jeweler recorded an $8 million tax gain.
Wal-Mart Stores Inc.
The Bentonville, Ark.-based retailer earned $1.82 billion, or 41 cents per share, in the three months ended Oct. 31 compared with $1.48 billion, or 33 cents per share, a year ago.
Analysts surveyed by Thomson First Call had expected Wal-Mart to earn 40 cents per share in the latest quarter.
Revenue rose to $59.33 billion from $53.19 billion in the year-ago period, which included the economic effects of the Sept. 11 terrorist attacks.
For the third quarter, same-store sales were up 3.5 percent, fueled by a 4.2 percent increase at Wal-Mart discount stores and Supercenters. Same-store or comparable store sales are sales in stores open at least a year.
Sam’s Clubs, the company’s warehouse club division, saw same-store sales rise a modest 0.4 percent. Operating profit for the division was $240 million during the quarter, a decrease of 2.4 percent from $246 million for the year-ago period.
Lee Scott, president and CEO, noted the retail giant is operating in a “challenging economic environment … with slowing comparable store sales growth.”
Wal-Mart expects same-store sales to be up in the 3 percent to 5 percent range for the fourth quarter, and stuck to its full-year earnings forecast of $1.76 to $1.78 per share.
The company’s net income for the first nine months of the year was $5.51 billion, or $1.24 per share, compared with $4.48 billion, or $1.00 per share in the year-ago period. Revenue rose to $174.9 billion from $154.9 billion a year ago.
Wal-Mart shares rose $1.13, or 2.1 percent, to $54.98 in trading on the New York Stock Exchange.
Federated Department Stores Inc.
The Cincinnati-based chain earned 54 cents per share for the three months ended Nov. 2, compared with 2 cents per share a year ago.
The results included an after-tax gain of $31 million related to the sale of the Arizona Mail Order and Figi’s catalog business, along with other Fingerhut assets.
Excluding the one-time gain, Federated earned $75 million, or 38 cents per share, up from $26 million, or 20 cents per share, a year ago. Analysts surveyed by Thomson First Call had expected 37 cents per share.
Sales for the quarter were $3.479 billion, compared with $3.475 billion a year ago. Same-store sales fell 2 percent.
For the first nine months of the year, profits totaled $477 million, or $2.37 per share, compared with $171 million, or 86 cents per share, a year ago. Sales totaled $10.42 billion, down from $10.5 billion a year ago.
Federated said it still expects earnings from continuing operations to be between $1.95 and $2.05 per share for the fourth quarter – and $3.35 to $3.45 per share for the full fiscal year, which ends on Feb. 1.
Analysts anticipate $1.99 per share for the fourth quarter, and $3.44 per share for the year.
Federated said it expects same-store sales during the fourth quarter to be unchanged or down slightly because of the slow economy and lack of consumer confidence.
Federated shares rose 76 cents, or 2.55 percent, to $30.55 in trading on the NYSE.
Tiffany & Co.
The New York-based jeweler earned $35.18 million, or 24 cents per share, in the three months ended Oct. 31 compared with $24.03 million, or 16 cents per share, in the year-ago period.
Excluding the nonrecurring tax gain of five cents per share, Tiffany earned 19 cents per share for the third quarter.
Analysts polled by Thomson First Call expected 18 cents per share.
Net sales for the quarter rose to $366.03 million, from $333.07 million a year ago.
Michael J. Kowalski, president and chief executive, said that he expects that net sales will be up in the low double digits in the fourth quarter, and he projects same-store sales in the United States to increase in the mid-single digit range.
The company said fourth-quarter earnings will be in the range of 60 cents to 65 cents. Analysts expect 63 cents per share.
For the nine months of the year, Tiffany earned $100.6 million, or 68 cents per share, compared with $90.84 million, or 60 cents per share in the year-ago period. Sales were $1.087 billion compared with $1.04 billion a year ago.
Tiffany shares rose $1.76, or 7.1 percent, to $26.59 in NYSE trading.
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