Federated Department Stores has reported total sales of $1.242bn for the four weeks ended June 2, 2001.

This is a decrease of 7.1 per cent from total sales of $1.336bn for the same period last year, in part reflecting the strategic downsizing of Fingerhut and the closing of the Stern's division.

On a comp-store basis, Federated's May sales were down 3.3 per cent. For the 17-week year to date, Federated's sales totaled $5.064bn, a decrease of 5.7 per cent compared to sales of $5.368bn for the first 17 weeks of last year. On a comp-store basis, Federated's year-to-date sales were down 2.0 per cent.

James M. Zimmerman, Federated's chairman and chief executive officer, said the year's continuing weak sales trend was exacerbated in May by unusually cool weather in the East and the impact of rising energy costs on the consumer in California.

"Although we are only one month into the second quarter, we are concerned by the May sales trend," Zimmerman said. "We are hopeful that more seasonably warm weather in June, combined with the boost to the economy from lower interest rates and anticipated federal tax rebates, will trigger a strengthening of sales as we move into the summer.

"Unless this trend in our department store sales is reversed, it is likely that earnings for the quarter will drop below prior guidance," Zimmerman added. He said an improvement in the sales trend should lead to June comp-store sales that are flat to down two per cent, reflecting the shift of Memorial Day into May this year, while a continuation of current sales trends would produce a four to five per cent decline in June comp-store sales.

Zimmerman said the company has initiated another review of its fall sales plan, which may be reduced below the flat to up one per cent current expectation. At this point, the company still hopes to attain its projected earnings of $4.00 to $4.25 a share for 2001, although Zimmerman noted that the goal will be difficult to achieve unless there is sales improvement shortly.

Federated, with corporate offices in Cincinnati and New York, is one of the US's leading department store retailers, with annual sales of more than $18.4bn. Federated currently operates more than 430 stores in 33 states and Puerto Rico under the names of Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus, Macy's and Rich's, as well as macys.com, bloomingdales.com and Bloomingdale's By Mail. Federated also operates the Fingerhut catalogue and e-commerce subsidiary.