Federated Department Stores isn't even done integrating May's stores into its stables, but the elimination of the competition has dramatically helped the retailer's bottom line. Thanks to strong same-store sales at both Bloomingdale's and Macy's, the Cincinnati retailer reported profits of $317 million, or 57 cents per share, compared with $148 million, or 42 cents per share in the same period a year ago. Federated's net income does reflect proceeds from the sale of its credit card business, nonetheless, the company's revenues like its net income also basically doubled.
Sales advanced to $6 billion from $3.6 billion in the year-ago quarter as same store sales at stores open at least a year improved 4.6%. When reporting the second quarter earnings, the retailer provided an update on its integration of May, which the company agreed to buy last year for $17 billion. Federated remains on track to re-open 400 May stores under the Macy's banner just after Labor Day weekend. Federated CEO Terry Lundgren indicated that these stores were actually holding the company back because of steep sales in order to clear out May inventory ahead of renovations. With that in mind, Federated upgraded its expectations for the second half of the year. Indeed, Lundgren's bet on May is paying dividends. —Matthew Wurtzel
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