13 Weeks Ended

November 1, 2003

November 2, 2002

      (millions, except per share figures)

         Income from continuing
            operations and average number
            of shares outstanding 

$  67 

182.0 

$ 75

194.3 

         Shares to be issued under
            deferred compensation plans

      - 

     .6 

     -

     .7 

$  67 

182.6 

$ 75

195.0 

             Basic earnings per share

$ .37 

$ .38

         Effect of dilutive securities -

             stock options

     - 

   3.1 

     -

     .9 

$  67 

185.7 

$ 75

195.9 

             Diluted earnings per share

$ .36 

$ .38

39 Weeks Ended

November 1, 2003

November 2, 2002

      (millions, except per share figures)

         Income from continuing
            operations and average number
            of shares outstanding 

$ 233 

185.1 

$ 297 

198.8 

         Shares to be issued under
            deferred compensation plans

      - 

    .7 

      - 

     .6 

$ 233 

185.8 

$ 297 

199.4 

             Basic earnings per share

$1.26 

$ 1.49

         Effect of dilutive securities -

             stock options

      - 

    1.7 

       - 

   1.7 

$ 233 

187.5 

$ 297 

201.1 

             Diluted earnings per share

$1.25 

$ 1.48

In addition to the stock options reflected in the foregoing tables, stock options to purchase 4.3 million shares of common stock at prices ranging from $43.88 to $79.44 per share were outstanding at November 1, 2003 and stock options to purchase 18.5 million shares of common stock at prices ranging from $33.75 to $79.44 per share were outstanding at November 2, 2002 but were not included in the computation of diluted earnings per share because the exercise price thereof exceeded the average market price and their inclusion would have been anti-dilutive.

FEDERATED DEPARTMENT STORES, INC.

Management's Discussion and Analysis

of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

For purposes of the following discussion, all references to "first"third quarter of 2003" and "first"third quarter of 2002" are to the Company's 13-week fiscal periods ended May 3,November 1, 2003 and May 4,November 2, 2002, respectively, and all references to "2003" and "2002" are to the Company's 39-week fiscal periods ended November 1, 2003 and November 2, 2002, respectively.

On May 22, 2003, the Company announced a strategy to more fully leverage its Macy's brand. Beginning in the fall season of 2003, The Bon Marche stores operate as Bon - Macy's, Lazarus stores operate as Lazarus - Macy's and Goldsmith's stores operate as Goldsmith's - Macy's. Beginning in fiscal 2004, Burdines stores will operate as Burdines - Macy's and the seven Macy's stores currently operating in Florida will be integrated into the Burdines - Macy's organization, although one of the current Macy's stores will close in September 2004. The Company believes that these changes will allow the Company to benefit from the expansion of the Macy's brand and should lead to more efficient operations.

In January 2003, the Company announced and commenced the implementation of its plans to integrate the stores of Rich's and Macy's in the metro Atlanta area and operate these and all other Rich's stores under a combined "Rich's-Macy's" nameplate, effective February 2, 2003. As part of the consolidation, sevencertain stores were closed. The Company currently anticipates that two locations will beclosed; however, one location was renovated and reopened as Bloomingdale's, one location will be renovated andpartially reopened as a Rich's-Macy's furniture gallery in July 2003 and fourtwo locations will be sold or leased for other retail use.were renovated and reopened as Bloomingdale's in October 2003. In the near term, the store closings and store closing costs are expected to have a negative impact on net sales and operating income, but in the longer term all of these actions are expected to positively affect operating income, cash flows from operations and return on investment.

On January 16, 2002, the Company's Boardboard of Directorsdirectors approved a plan to dispose of the operations of Fingerhut Companies, Inc. ("Fingerhut"), including the Arizona Mail Order, Figi's and Popular Club Plan businesses conducted by Fingerhut's subsidiaries, which were acquired by the Company on March 18, 1999. The decision to dispose of Fingerhut was based on management's determination that there was no longer strategic value to Federated in retaining the Fingerhut operations and there was no expectation, based on Fingerhut's historical earnings and future prospects, that this business would contribute meaningfully to the Company's future financial performance. The plan of disposition approved by the Company's board of directors contemplated a disposal by liquidation of the Fingerhut core catalog operations and a disposal by sale of Fingerhut's three catalog subsidiaries, Arizona Mail Order, Figi's and Popular Club Plan. As of February 1, 2003, substantially all Fingerhut assets had been disposedd isposed of and sub stantiallysubstantially all Fingerhut liabilities had been settled.

The Company's Consolidated Financial Statements for all periods account for Fingerhut as a discontinued operation as a result of the Company's decision to dispose of the Fingerhut operations. Unless otherwise indicated, the following discussion relates to the Company's continuing operations.

Results of Operations

Comparison of the 13 Weeks Ended May 3,November 1, 2003 and May 4,November 2, 2002

NetIncome from continuing operations and net income for the firstthird quarter of 2003 totaled $46$67 million, compared to $89income from continuing operations of $75 million and net income of $106 million for the firstthird quarter of 2002. The lowerthird quarter of 2002 included $31 million of income from the disposal of discontinued operations, net of tax effect. The decrease in income results from a combinationcontinuing operations for the third quarter of lower sales and2003 compared to the third quarter of 2002 reflects higher cost of sales, partially offset by lower selling, general and administrative ("SG&A") expenses.expenses, including $29 million of store closing and consolidation costs, partially offset by improved gross margin and lower interest expense.

Net sales for the firstthird quarter of 2003 totaled $3,291$3,486 million, up 0.2% compared to net sales of $3,453$3,479 million for the firstthird quarter of 2002, a decrease of 4.7%. The overall sales trend in the first quarter of 2003 was negatively impacted by the difficult economic climate.2002. On a comparable store basis (sales from stores in operation throughout the first quarter of 2002 and the first quarter of 2003), net sales for the firstthird quarter of 2003 decreased 5.0%increased 0.3% compared to the firstthird quarter of 2002. Sales during the third quarter of 2003 were particularly strong at Bloomingdale's, but every division produced an improved sales trend. By family of business, sales were strongeststrong in men's and women's apparel driven by career apparel and more contemporary fashions. Sales were also strong in jewelry, handbags, cosmetics, juniors, young men's, men's tailored clothingfurniture and furniture. The weakest businesses were women's and men's sportswear, intimate apparel, women's shoes and small ticket home areas, especially housewares and tabletop (china, silver, glass).bedding. Weaker sales trends continued to be experienced in housewares.

Cost of sales was 60.8%60.0% of net sales for the firstthird quarter of 2003, compared to 60.2%60.7% for the firstthird quarter of 2002. TheIn the third quarter of 2003, the cost of sales rate for the first quarter of 2003 reflects higherand corresponding gross margin benefited from lower net markdowns due to the weak sales trend and to maintain inventories at appropriate levels.lower inventory levels combined with improved sales. Merchandise inventories were down 3.8%5.0% at the end of the third quarter of 2003 as compared to the firstthird quarter of 2002. The valuation of merchandise inventories on the last-in, first-out basis did not impact cost of sales in either period.

SG&A expenses were 34.8%35.0% of net sales for the firstthird quarter of 2003, compared to 33.4%33.9% for the firstthird quarter of 2002. SG&A expenses in actual dollars for the firstthird quarter of 2003 were down slightlyup 3.7% compared to the firstthird quarter of 2002; however,2002 due to the lower sales level, SG&A expenses increased 1.4 percentage points as a percent of net sales. Included in SG&A expenses for the first quarter of 2003 were approximately $8 million of costs primarily accelerated depreciation, incurred in connection with the Rich's-Macy's consolidation and other announced store closings. The higher SG&A expense rate reflectsclosings and higher depreciation and amortization expense, higher pension expense and higher selling costs, although selling costsexpense. Included in dollars were lower inSG&A expenses for the firstthird quarter of 2003 thanwere $29 million, 0.8% of net sales, of store closing and consolidation costs ($8 million related to the prior year.Rich's-Macy's consolidation). SG&A expenses for the third quarter of 2002 did not include any store closing or consolidation costs.

Net interest expense was $70$61 million for the firstthird quarter of 2003, compared to $74$73 million for the firstthird quarter of 2002.2002, primarily due to the lower level of borrowings.

The Company's effective income tax rate of 39.9%39.8% for the firstthird quarter of 2003 and 39.7% for the first quarter of 2002 differdiffers from the federal income tax statutory rate of 35.0% principally because of the effect of state and local income taxes. The Company's effective income tax rate of 35.4% for the third quarter of 2002 differs from the federal income tax statutory rate of 35.0% principally because of the effect of state and local income taxes, offset by adjustments of prior year permanent differences.

During October 2002, the Company completed the sale of the Arizona Mail Order and Figi's businesses conducted by Fingerhut's subsidiaries. For the third quarter of 2002, the actual proceeds from the sale of these subsidiaries and certain other Fingerhut assets exceeded the estimated amounts by $50 million before income taxes, or $31 million after income taxes.

Comparison of the 39 Weeks Ended November 1, 2003 and November 2, 2002

Income from continuing operations and net income for 2003 totaled $233 million, compared to income from continuing operations of $297 million and net income of $477 million for 2002. Net income for 2002 included $180 million of income from the disposal of discontinued operations, net of tax effect. The lower income from continuing operations results from a combination of lower sales and higher SG&A expenses, including $47 million of store closing and consolidation costs, partially offset by lower interest expense.

Net sales for 2003 totaled $10,211 million, compared to net sales of $10,418 million for 2002, a decrease of 2.0%. On a comparable store basis (sales from stores in operation throughout 2002 and 2003), net sales also decreased 2.0% compared to 2002. By family of business, sales were strongest in furniture, bedding and cosmetics. The weaker businesses were the small ticket home areas, especially housewares.

Cost of sales was 59.9% of net sales for 2003 and 2002. The valuation of merchandise inventories on the last-in, first-out basis did not impact cost of sales in either period.

SG&A expenses were 34.4% of net sales for 2003 compared to 33.3% for 2002. SG&A expenses in actual dollars for 2003 increased 1.2% compared to 2002. Included in SG&A expenses for 2003 were approximately $47 million of costs incurred in connection with the Rich's-Macy's consolidation and other announced store closings. Excluding store closing and consolidation costs, SG&A expense in actual dollars for 2003 would be relatively flat compared to 2002.

Net interest expense was $196 million for 2003, compared to $225 million for 2002, primarily due to the lower level of borrowings.

The Company's effective income tax rate of 39.7% for 2003 differs from the federal income tax statutory rate of 35.0% principally because of the effect of state and local income taxes. The Company's effective income tax rate of 38.6% for 2002 differs from the federal income tax statutory rate of 35.0% principally because of the effect of state and local income taxes and permanent differences arising from other items.

During October 2002, the Company completed the sale of the Arizona Mail Order and Figi's businesses conducted by Fingerhut's subsidiaries. During July 2002, the Company completed the sale of Fingerhut's core catalog accounts receivable portfolio, with the buyer assuming $450 million of receivables-backed debt, and in a separate transaction completed the sale of various other Fingerhut assets, including two distribution centers, the corporate headquarters, a data center, existing inventory, the Fingerhut name, customer lists and other miscellaneous property and equipment.

Proceeds from all of the above sale transactions and collections on customer accounts receivable prior to the sale, net of operating expenses, exceeded the amount estimated to be received through wind-down of the portfolio and liquidation of the assets, resulting in an adjustment to the loss on disposal of discontinued operations for 2002 totaling $286 million of income before income taxes, or $180 million after income taxes.

Liquidity and Capital Resources

The Company's principal sources of liquidity are cash from operations, cash on hand and available credit facilities.

Net cash provided by continuing operating activities in the first quarter of 2003 was $204$630 million, compared to the $169$272 million provided in the first quarter of 2002. Cash provided by continuing operating activities in the first quarter of 2003 reflects a smaller increase in merchandise inventories, and ana greater increase in accounts payable and accrued liabilities and increases in current and deferred income taxes payable in 2003 versus a decreasedecreases in 2002, partially offset by a smaller decrease in accounts receivable.

Net cash used by continuing investing activities was $52$356 million for the first quarter of 2003, compared to the $92 million used in the first quarter of 2002.2003. Investing activities for the first quarter of 2003 included purchases of property and equipment totaling $41$313 million and capitalized software of $13$46 million. Investing activities for the first quarter of 2002 included purchases of property and equipment totaling $81$406 million, and capitalized software of $11 million.$40 million and the acceptance of a $39 million note receivable related to the sale of certain Fingerhut assets. The Company opened one new home store during the first quarter of 2003 and plans to open seven additionalsix department stores, fivefour furniture galleries and atwo home storestores during the remainder of 2003. The Company's budgetedCompany expects capital expenditures areto be approximately $650$600 - $625 million for 2003.

Net cash used by the Company for all continuing financing activities was $124$763 million for the first quarter of 2003, including $120the repayment of $450 million of 8.5% senior notes and approximately $485 million for the acquisition of treasury stock.stock, partially offset by $104 million from the issuance of common stock related to the exercise of stock options.

On April 16, 2003, the Company's Boardboard of Directors declared an initial quarterly dividend of 12.5 cents per share on Federated Common Stock. The dividend is payable July 1, 2003 to shareholders of record at the close of business on June 16, 2003. The Company currently intends to pay regular quarterly dividends going forward. On the same date, the Company's Board of Directors alsodirectors approved a $500 million increase to the Company's existing stock repurchase program. During the first quarter of 2003, the Company purchased 4.313.1 million shares of its Common Stock under the stock repurchase program at an approximate cost of $120$485 million. As of May 3,November 1, 2003, the Company had approximately $590$230 million of authorization remaining under the Company's stock repurchase program. The Company may continue or, from time to time, suspend repurchases of shares under its stock repurchase program, depending on prevailing market conditions, alternate uses of capital and other factors.

Net cash provided to the Company by discontinued operations was $249$731 million for the first quarter of 2002, primarily due to customer payments onthe sale of Fingerhut's core catalog accounts receivable.receivable portfolio, the sale of the Arizona Mail Order and Figi's businesses and the sale of various other Fingerhut assets.

In June 2003, the Company took action to renewrenewed its 364-day revolving credit facility to June 25, 2004 and voluntarily reducereduced the borrowing capacity under this facility to $200 million. As a result, the Company's ability to borrow under the Company's bank credit agreements and commercial paper program will behas been reduced to a maximum of $1,400 million.

On October 24, 2003, the Company's board of directors declared a quarterly dividend of 12.5 cents per share on Federated Common Stock. The dividend is payable January 2, 2004 to shareholders of record at the close of business on December 15, 2003.

Management believes that, with respect to the Company's current operations, cash on hand and funds from operations, together with its credit facilities and other capital resources, will be sufficient to cover the Company's reasonably foreseeable working capital, capital expenditure and debt service requirements and capital transactions in both the near term and over the longer term. The Company's ability to generate funds from operations may be affected by numerous factors, including general economic conditions and levels of consumer confidence and demand; however, the Company expects to be able to manage its working capital levels and capital expenditure amounts so as to maintain its liquidity levels. Depending upon conditions in the capital markets and other factors, the Company will from time to time consider the issuance of debt or other securities, or other possible capital markets transactions, the proceeds of which could be used to refinance current indebtedness or for other corporatecorpor ate purposes.

Management believes the department store business and other retail businesses will continue to consolidate. The Company intends from time to time to consider additional acquisitions of, and investments in, department stores and other complementary assets and companies. Acquisition transactions, if any, are expected to be financed through a combination of cash on hand and from operations and the possible issuance from time to time of long-term debt or other securities.

Outlook

The Company is assuming that general economic and other conditions and consumer confidence and demand will be such that comparable store sales will be flat to down 1.5 percent for 2003: down 2 to 3 percent in the second quarter and between down 1 percent and up 1 percent in the second half of the fiscal year, which ends January 31, 2004. Comparable store sales for the monthfourth quarter of May decreased a lower than expected 0.8%. If2003, compared to the Company's sales continue to exceed expectations, the sales performance in the secondfourth quarter would be better than the projected down 2 to 3 percent.of 2002. The Company presently expects to achieve earnings per share from continuing operations in the fourth quarter of 2003 of $3.10$2.15 to $3.25: 50 to 55 cents$2.20 a share in the secondshare. These fourth quarter and $2.40 to $2.50 a share in the second half of 2003. These estimates include additional store-closing and consolidation costs of $10approximately $10-15 million, primarily to $15 millionbe recorded in the second quarter and $12 to $17 million in the second half of the year.SG&A expenses. In connection with these estimates, the Company is assuming that t hethe gross margin rate will be approximately flat for the year, although it is likely to be downup slightly compared to 2002 for the second quarter,last year, and SG&A dollars, excluding the aforementioned store-closing and consolidation costs, will also increase slightly with larger increases assumed in the second half of the year when the sales growth is assumedcompared to be higher.last year.

On May 22, 2003, the Company announced a strategy to more fully leverage its Macy's brand. Effective August 1, 2003, The Bon Marche stores will operate as The Bon - Macy's, Lazarus stores will operate as Lazarus - Macy's and Goldsmith's stores will operate as Goldsmith's - Macy's. Effective February 1, 2004, Burdines stores will operate as Burdines - Macy's and the seven Macy's stores currently operating in Florida will be integrated into the Burdines - Macy's organization. The Company believes that these changes will allow the Company to benefit from the expansion of the Macy's brand and should lead to more efficient operations.

The accuracy of the assumptions and the resulting forecasts described above is subject to uncertainties and circumstances beyond the Company's control. Consequently, actual results could differ materially from the forecasted results. See "Forward-Looking Statements""Other Information" in Item 5 of Part II of this report for a discussion of matters that could cause actual results to vary from the Company's expectations.

Item 4. Controls and Procedures

The Company's Chief Executive Officer and Chief Financial Officer evaluatedhave carried out, as of November 1, 2003, an evaluation of the effectiveness of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) as of a date within 90 days prior to the filing of this report.Rule 13a-15(e)). Based on this evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms. Subsequent to the date of this evaluation, there have not been any significantThere were no changes in the Company's internal controlscontrol over financial reporting that occurred during the Company's most recently completed fiscal quarter that materially affected, or are reasonably likely to management's knowledge, in other factors that could significantlymaterially affect, the Company's internal controls.control over financial reporting.

PART II -- OTHER INFORMATION

FEDERATED DEPARTMENT STORES, INC.

Item 1. Legal Proceedings

The Company and certain members of its senior management have been named defendants in five substantially identical purported class action complaints filed on behalf of persons who purchased shares of the Company between February 23, 2000 and July 20, 2000. Originally filed in August, September and October 2000, in the United States District Court for the Southern District of New York, the actions have been consolidated into a single case (In Re Federated Department Stores, Inc. Securities Litigation, Case No. 00-CV-6362 (RCC)) and a consolidated amended complaint (the "Complaint") has been filed. The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, on the basis that the Company, among other things, made false and misleading statements regarding its financial condition and results of operations and failed to disclose material information relating to the credit card account delinquenciesdelinquency problem at the Company's former Fingerhut subs idiary.Fing erhut subsidiary. The plaintiffs are seeking unspecified amounts of compensatory damages and costs, including legal fees. Management intends to defend vigorously against those allegations. A motion to dismiss the Complaint is pending. Discovery has not commenced.

Item 4. Submission of Matters to a Vote of Security Holders

Item 5. Other Information

Forward-Looking Statements

This report and other reports, statements and information previously or subsequently filed by the Company with the Securities and Exchange Commission (the "SEC") contain or may contain forward-looking statements. Such statements are based upon the beliefs and assumptions of, and on information available to, the management of the Company at the time such statements are made. The following are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: (i) statements preceded by, followed by or that include the words "may," "will," "could," "should," "believe," "expect," "future," "potential," "anticipate," "intend," "plan," "think," "estimate" or "continue" or the negative or other variations thereof, and (ii) statements regarding matters that are not historical facts. Such forward-looking statements are subject to various risks and uncertainties, including (a) risks and uncertainties relating to the possible invalidity of the underlying beli efsbeliefs and assumptions, (b) possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions, (c) actions taken or omitted to be taken by third parties, including customers, suppliers, business partners, competitors and legislative, regulatory, judicial and other governmental authorities and officials, and (d) attacks or threats of attacks by terrorists or war. Furthermore, future results of the operations of the Company could differ materially from historical results or current expectations because of a variety of factors that affect the Company, including transaction costs associated with the renovation, conversion and transitioning of retail stores in regional markets; the outcome and timing of sales and leasing in conjunction with the disposition of retail store properties; the retention, reintegration and transitioning of displaced employees; and competitive pressures from department and specialty stores, general merchandise stores, manufac turers'manufacturers' outlets, off-price and discount stores, and all other retail channels; and general consumer-spending levels, including the impact of the availability and level of consumer debt, levels of consumer confidence the effect of weather and the possible effects of the recent SARS epidemic on the procurement of merchandise from non-U.S. sources.weather. In addition to any risks and uncertainties specifically identified in the text surrounding such forward-looking statements, the statements in the immediately preceding sentence and the statements under captions such as "Risk Factors" and "Special Considerations" in reports, statements and information filed by the Company with the SEC from time to time constitute cautionary statements identifying important factors that could cause actual amounts, results, events and circumstances to differ materially from those reflected in such forward-looking statements.

Item 6. Exhibits and Reports on Form 8-K

A.

Exhibits

                       99        

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a).

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a).

32.1

Certifications by Chief Executive Officer and Chief Financial Officer under Section
906 of the Sarbanes-Oxley Act
Act.

B.

Reports on Form 8-K

1.	Current report on Form 8-K, dated February 10, 2003, reporting matters under item 9
						1		Current report on Form 8-K, dated August 7, 2003, reporting matters under item 12 thereof.
						2		Current report on Form 8-K, dated August 13, 2003, reporting matters under item 12 thereof.
2.																				Current report on Form 8-K, dated February 18, 2003, reporting matters under item 9 thereof.
3.	Current report on Form 8-K, dated February 24, 2003, reporting matters under item 9 thereof.
4.	Current report on Form 8-K, dated March 10, 2003, reporting matters under item 9 thereof.
5.	Current report on Form 8-K, dated March 17, 2003, reporting matters under item 9 thereof.
6.	Current report on Form 8-K, dated March 24, 2003, reporting matters under item 9 thereof.
7.	Current report on Form 8-K, dated March 31, 2003, reporting matters under item 9 thereof.
8.	Current report on Form 8-K, dated April 14, 2003, reporting matters under item 9 thereof.
9.	Current report on Form 8-K, dated April 16, 2003, reporting matters under item 5 thereof.
10.	Current report on Form 8-K, dated April 21, 2003, reporting matters under item 9 thereof.
11.	Current report on Form 8-K, dated April 28, 2003, reporting matters under item 9 thereof.

FEDERATED DEPARTMENT STORES, INC.

Exhibit 32.1

CERTIFICATION UNDER SECTION 906 OF THE SARBANES-OXLEY ACT

     Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in connection with the filing of the Form 10-Q of Federated Department Stores, Inc. (the "Company") for the fiscal quarter ended August 2, 2003, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), of the undersigned officers of the Company certifies, that, to such officer's knowledge:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Dated:  December 16, 2003

/s/ Terry J. Lundgren                

Name: Terry J. Lundgren

Title: Chief Executive Officer

/s/ Karen M. Hoguet                

Name: Karen M. Hoguet

Title: Chief Financial Officer