Putting what chief executive Terry Lundgren termed a "superb finish" on a challenging year, Federated Department Stores reported Tuesday (27 February) that it had exceeded fourth-quarter earnings estimates and put in motion a plan to change its name to Macy's Group.

During the 14 weeks ended 3 February, the nation's largest department store retailer increased its net income 4.9% to $733m, or $1.40 a diluted share, from the $699m, or $1.26, registered during the 13-week quarter ended in January 2006.

Excluding costs related to the integration with May Company, earnings per share for continuing operations were $1.66, 6 cents above the high end of guidance furnished by the company earlier this month.

Sales in the quarter retreated 4.3% to $9.16bn from $9.57bn, but same-store sales were up 6.1%. The same-store sales figure strips out the extra week of selling in last year's fourth quarter as well as results from about 80 "duplicative" stores sold off by Federated during the year.

Federated's board has approved a plan to change the name of the company to Macy's Group. The name change would be effective 1 June if approved by shareholders at the annual meeting on May 18.

"Today, we are a brand-driven company focused on Macy's and Bloomingdale's, not a federation of department stores," Lundgren said in a statement.

"By aligning our corporate name with our largest brand, we will increase the visibility of the company with customers, leverage the world-famous Macy's brand name, and get more credit for our accomplishments in the marketplace."

Macy's accounts for about 90% of company sales, he pointed out, adding that Bloomingdale's "is and will remain a very important part of the company." He added that the name change wouldn't prevent the company from "growing in any direction in the future."

Federated said it expects same-store sales increases of 2% to 3.5% during the current year and total revenues of between $27.1bn and $27.6bn. Excluding special items, earnings per diluted share should total $2.45 to $2.60.

For the full year, net income dropped 29.2% to $995m, or $1.81 a diluted share, from $1.41bn, or $3.24, in fiscal 2005. Excluding nonrecurring items, EPS was $2.30 versus $2.55. Sales rose 20.5% to $26.97bn from $22.39bn and were up 4.4% on a comparable-store basis.

By Arnold J Karr.