Merger Costs May In Second Quarter
August 15, 2005-- Home Textiles Today,
St. Louis — The May Department Stores Company reported net earnings fell to $52 million for its second quarter, compared with $101 million last year, due largely to $63 million in expenses related to the proposed merger with Federated Department Stores.
Of that number, $57 million was related to accelerated stock-compensation charges triggered by shareowner approval of the merger.
Net sales for the second quarter were $3.45 billion, up 16.6 percent, compared with $2.96 billion last year. Comp-store sales decreased 1.6 percent.
“Despite the disappointing store-for store sales during the 2005 second quarter, May's inventories are well-positioned going into the fall season,” the company stated. “Overall store-for-store inventories, which exclude Marshall Field's, at the end of July, are 6 percent below last year.”
Second quarter earnings also include net store divestiture gains of $8 million, or 2 cents per share, and an $18 million income tax provision reduction. The net gain on store divestitures resulted from gains on the sale of certain stores, according to the company. Second quarter 2004 earnings included store divestiture costs of $15 million.
May also noted that during the quarter it completed the repayment of all short-term borrowing incurred to fund the acquisition of Marshall Field's in July 2004. The company stated that it holds $323 million of cash and cash equivalents as of July 30.
May Department Stores Company
|Qtr. 7/30 (x000)||2005||2004||% change|
|Oper. Income (EBIT)||54||160||-66.3|
|Per Share (diluted)||0.16||0.33||-51.5|
|Average Gross Margin||28.4%||30.1%||—|
|26 Weeks ended 7/30 (x000)||2005||2004||% change|
|Oper. Income (EBIT)||96||281||-65.8|
|Per Share (diluted)||0.29||0.57||-49.0|
|Average Gross Margin||29.9%||29.1%||—|