follow us

May has strong Jan., Feb. & March

Don Hogsett -- Home Textiles Today, May 17, 2004

First-quarter profits at May Department Stores Co. improved 5.6 percent, to $76 million from $72 million last year, as stronger margins and lower costs offset a handful of remaining charges tied to the shutdown of 34 underperforming Lord & Taylor department stores.

Sales at the retailer improved 3.1 percent, to $3 billion from $2.9 billion last year, while same-store sales increased 1.7 percent. Same-store sales climbed even higher, 2.5 percent, excluding results of the 19 stores that remain to be closed.

Putting a cap on bottom-line growth during the opening quarter, and acting as a partial offset to improving operations, were $5 million in restructuring markdowns stemming from inventory liquidation at shuttered stores, and another $2 million in restructuring costs.

Providing a solid boost to earnings, average gross margin widened 110 basis points, or 1.1 percentage points, to 28.4 percent from 27.3 percent a year ago. Gross margin dollars climbed 7.4 percent, to $843 million from $785 million during the same period a year ago.

In another assist, operating costs were whittled .02 percent, to $639 million from $640 million a year ago, yielding a cash savings of $1 million. When measured as a percentage of rising sales, costs were pared 80 basis points, or eight-tenths of a percentage point, to 21.5 percent from 22.3 percent.

In another prop to the bottom line, interest expense was whittled 5 percent, to $76 million from $80 million a year ago, generating another cash savings of $4 million.

In an operational improvement, stockpiles were throttled down 5 percent, to $3 billion from $3.2 billion, another savings of $158 million.

Helped by improving operations, operating profits jumped more than a third, rising 37.2 percent, to $199 million from $145 million last year. But, overall, profits rose at a more sluggish pace of 5.6 percent as the retailer paid $45 million in taxes, while last year it recorded a tax benefit of $7 million.

May Department Stores Co.

Qtr. 5/1 (x000) 2004 2003 % chg
Sales $2,963,000 $2,873,000 3.1
Oper. income (EBIT) 199,000 145,000 37.2
Net income 76,000a 72,000a 5.6
Per share (diluted) 0.24 0.23 4.3
Average gross margin 28.4% 27.3%
SG&A expenses 21.5% 22.3% -—
a-First-quarter results include $5 million in restructuring markdowns tied to the liquidation of inventory in 34 closed department stores; restructuring costs of $2 million; and an income-tax provision of $45 million, compared with a $7 million income-tax credit during the same period a year ago.


Featured Video

  • Online Moves From Afterthought To Main Thought For Textiles Suppliers

    Camera Icon More Videos

Other Home Furnishings Sites

Casual Living
Gifts and Decorative Accessories
Home Accents Today
Kids Today
Furniture Today