Profits plummet at May

ST. LOUIS -- Hurt by a punishing trifecta of weakening same-store sales, eroding margins and higher costs, and further nicked by store closing costs, fourth quarter profits at May Department Stores Co. tumbled 20.2 percent, falling to $626 million from $752 million last year.

Helped by the earlier acquisition of the Marshall Field's department store chain from Target Corp., overall sales advanced at a double-digit pace, rising 12.1 percent, to $5 billion from $4.5 billion last year. But the crucial gauge of same-store sales fell 5.2 percent.All of the damage to the bottom line was done by the core May Department Stores business, and the retailer said the new Marshall Field's business performed well, contributing 5 cents a share to total company earnings of $1.10 per share, even after start-up and integration costs tied to the acquisition.Costs climbed 200 basis points, or 2 percentage points, "largely driven by decreased sales leverage resulting in a 1.2 percent increase in costs such as payroll and finance," the company said. Almost half of the increase in costs stemmed from the expense structure at Marshall Field’s and start-up integration costs, the retailer added.Taking another bite out of profits, interest expense increased 37.5 percent, due largely to the Marshall Field's acquisition, to $110 million from $80 million a year ago.

Home & Textiles Today Staff | News & Commentary

 Home Textiles Today is the market-leading brand covering the home and textiles markets, offering a comprehensive package of print and online products. Home & Textiles Today provides industry news, product trends and introductions, exclusive industry research, consumer data, store operations solutions, trade show news and much more.

Featured Video

  • Live From New York: Fashion Comes Across the Pond

    Camera Icon More Videos

Subscribe to
Home & Textiles Today eDaily
Receive the news you need to know about the trends in the industry delivered right to your inbox.


HTT Cover October 2017

See the October 2017 issue of Home & Textiles Today. In this issue, we look at the Top 25 Online Retailers.  H&TT's exclusive annual ranking of the biggest online sellers of home textiles finds that while pure play etailers continue to fly, bricks & clicks are digging into omnichannel. See details!