Two of the country's largest retailers -- Federated Department Stores Inc. and Kmart Corp. -- reported sharply higher first-quarter earnings yesterday.
Cincinnati-based Federated, the No. 3 U.S. department-store company, said profit rose 45 percent as it held down costs and sold more spring fashions.
Net income rose to $87 million, or 40 cents a share, from $60 million, or 27 cents, a year earlier. Federated beat by 9 cents the average estimate of analysts polled by First Call Corp. for the quarter that ended May 1.
Revenue rose 7.3 percent to $3.71 billion from $3.46 billion. Federated has more than 400 stores, including Macy's, Bloomingdale's and the Bon Marche.
Federated wrapped up a three-year effort to reduce inventory and other operating expenses. The retailer, which doubled in size through acquisitions this decade, shut distribution centers and streamlined how it ships and monitors inventory to pare costs.
Troy, Mich.-based Kmart, the No. 2 U.S. discount retailer, said fiscal first-quarter earnings rose 43 percent as it boosted sales of clothing and home goods.
Net income rose to $67 million, or 14 cents a share, from $47 million, or 10 cents, a year earlier.
Sales rose 8.4 percent to $8.14 billion, its biggest rise in four years, lifted by private-label goods such as Jaclyn Smith fashions and Martha Stewart lawn-and-garden furniture.
Even so, Kmart is still struggling to carve a place for itself alongside its bigger, lower-price rival Wal-Mart Stores Inc. and the more fashion-oriented Target, a unit of Dayton Hudson Corp.