Here is a look at Tuesday's top business stories:
Earnings decline at Home Depot
ATLANTA, Feb. 25 (UPI) -- Home Depot Inc., the world's largest home improvement retailer, said its fourth-quarter net income fell to $686 million, or 30 cents a share, from $710 million, or the same 30 cents a share during the same period a year earlier.
Analysts on Wall Street had expected Home Depot to post a net income of 27 cents a share, according to Thomson First Call.
Overall sales declined 2 percent to $13.2 billion. But sales at stores open at least a year, an important retail measure, fell 6 percent from a year earlier.
Last month Home Depot warned that same-store sales could fall as much as 10 percent because of weak holiday sales and disruption to customer traffic from merchandise changeovers.
The home improvement retailer also reported record net earnings for the year of $3.7 billion, or $1.56 a share, compared with $3 billion, or $1.29 a share in fiscal 2001.
Sales for fiscal 2002 rose 9 percent to $58.2 billion but same store sales were flat.
Home Depot noted the fourth quarter of 2001 consisted of 14 weeks and the year included 53 weeks. Comparing similar 52-week periods for 2001 to 2002, sales for 2002 increased 11 percent and earnings per diluted share increased 24 percent. Comparing equivalent 13-week periods for the fourth quarter, sales for 2002 increased 5 percent and earnings per diluted share increased 11 percent, the company said.
Bob Nardelli, chairman, president and chief executive officer, said, "The Home Depot delivered strong earnings growth for fiscal 2002 as we continued the process of transforming the infrastructure of our business.
"Throughout the year we launched new programs to reinvigorate product assortments, reset critical departments within our stores, and develop customer service initiatives. In 2002, we were especially pleased with our appliance business, where we captured considerable market share. The challenges presented by the pace and scope of these initiatives have been daunting and it is a tribute to our most valuable assets, our dedicated associates, that we have delivered solid earnings performance throughout the year," Nardelli said.
Looking ahead, Nardelli said, "In fiscal 2003, we expect to open 200 new stores and add 40,000 associates.
"While the strength of our balance sheet and our operating performance allow us to stay on strategy, we remain cautious due to the current geopolitical environment and the domestic economy," Nardelli added.
The Home Depot also reaffirmed that it expects sales for fiscal 2003 to increase between 9 and 12 percent and earnings per diluted share to increase between 9 and 14 percent. Comparable sales are expected to be flat to slightly positive on the year.
The company also indicated that, beginning with fiscal year 2003, it would provide sales, earnings and other financial forward-looking guidance on an annual basis only, consistent with its long-term outlook for the business.
The Home Depot currently operates 1,532 stores, including 1,370 Home Depot stores in the United States, 89 Home Depot stores in Canada, and 12 Home Depot stores in Mexico. The company also operates 52 EXPO Design Centers, 5 HD Supply stores, 3 HD Landscape Supply stores, and one Home Depot Floor Store.
Federated posts fourth-quarter profit
CINCINNATI, Feb. 25 (UPI) -- Federated Department Stores Inc., the parent of Macy's and Bloomingdale's, said it posted a fourth-quarter profit, compared with a year-ago loss, and said Chief Operating Officer Terry Lundgren had been named chief executive.
The retailer said it posted a fourth-quarter net income of $341 million, or $1.78 a share, compared with a year-earlier loss of $447 million, or $2.23 a share.
Last year's loss included $770 million in one-time costs to wind down its Fingerhut catalog business.
Excluding asset impairment, store closings and other restructuring items, profit was $1.99 a share in the latest quarter.
Analysts on Wall Street were expecting the retailer to post a net income of $1.95 per share, according to Thomson First Call.
For the 13-week fourth quarter, Federated said its total sales declined 2.2 percent to $5.02 billion from $5.13 billion a year earlier. On a same-store basis, the company's sales declined 3.9 percent in the quarter.
James M. Zimmerman, chairman and chief executive officer, said, "Although a weak economy and disappointing sales made 2002 difficult, particularly the fall season, we were pleased that we were able to produce earnings per share that were solidly within our original year-ago guidance of $3.30 to $3.55.
"In addition to earnings that were in line with our expectations, the most significant indicators of Federated's positive performance were continued strong free cash flow and gross margins that reflect effective inventory management," Zimmerman said.
Lundgren's promotion was part of a long-planned management transition, the company said. James Zimmerman, current chief executive, will continue as chairman.
Looking ahead, Federated raised its guidance for 2003 and now expects to achieve earnings per share of $3.05 to $3.25 a share in fiscal 2003 or 14 to 19 cents a share in the first quarter, 55 to 60 cents a share in the second quarter and $2.44 to $2.54 a share in the second half of the fiscal year, which ends Jan. 31, 2004.
The estimates include store-closing costs of $35 million in the first quarter and $5 million in both the second quarter and the second half of the year.
Same-store sales of flat to down 1.5 percent is forecasted for 2003, or down 2 to 3 percent in the first quarter, down 1 to 2 percent in the second quarter and between down 1 percent to up 1 percent in the fall season.
Federated currently operates more than 450 stores in 34 states, Guam and Puerto Rico, under the names of Macy's, Bloomingdale's, The Bon Marche, Burdines, Goldsmith's, Lazarus and Rich's-Macy's.
