Retail giant Federated Department Stores Inc on Wednesday posted first quarter earnings above expectations with diluted earnings per share of 43 cents - well above its original guidance of 25-30 cents a share for the quarter.

The Cincinnati-based company said operating income for the period was $221 million, or 6.4 per cent of sales, versus operating income of $178m, or five per cent of sales, in 2001, including restructuring charges of $223m, or 6.3 per cent of sales excluding those charges.

It added sales fell 2.9 per cent to $3.5 billion, while cash flow from operating activities was $169m compared to $3m in the same period last year.
 
James M. Zimmerman, Federated chairman and CEO commented: "We've had a strong start to 2002, with first quarter earnings and cash flow that significantly exceeded our original expectations. We are hopeful that this strong start bodes well for our ability to meet expectations for the remainder of the year."