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Retailers Post Profit but Outlook Iffy

November 14, 2002|Angela Moore | Reuters

NEW YORK -- Retail giants Wal-Mart Stores Inc. and Federated Department Stores posted higher quarterly earnings Wednesday, but analysts remain worried about weaker consumer spending in the holiday season.

Wal-Mart, the world's biggest retailer, said profit jumped 23% in the quarter ended Oct. 31.

Federated, parent of Macy's and Bloomingdales, also posted strong earnings, helped by tighter inventories that reduced the need for markdowns.

Wal-Mart said net income climbed to $1.82 billion, or 41 cents a share, from $1.48 billion, or 33 cents, a year earlier. Sales rose 11% to $58.8 billion.

But Wal-Mart said earnings in the current quarter could be as low as 53 cents a share. Analysts had expected 55 cents.

Federated said net income in the latest quarter jumped to $106 million, or 54 cents a share, from $3 million, or 2 cents, a year earlier. Results in both quarters were skewed by one-time items. Excluding those items, Federated said profit was $75 million versus $26 million a year earlier.

Sales were up less than 1%, to $3.48 billion.

Federated forecast that same-store sales in the current quarter will be flat to down 2%.

Despite concerns, Wal-Mart stock rose 2.1% to $54.98; Federated shares gained 2.6% to $30.55.

Luxury jeweler Tiffany & Co.'s said its quarterly profit jumped 46%, to $35.2 million, or 24 cents a share, helped by easy comparisons with a year earlier, when the terrorist attacks depressed results. Sales rose 10% to $366 million.

Tiffany said it expected fourth-quarter growth despite the sluggish economy. Its stock jumped 7% to $26.59.

Women's clothing retailer AnnTaylor Stores Corp. said after the market closed that quarterly earnings more than doubled to $24.9 million, or 53 cents a share, the company's most profitable third quarter ever as it was able to sell more clothes at full price. Sales rose 9.5% to $340 million.

Ann Taylor stock rose 3.5% to $24.25 before the announcement.

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