NEW YORK -- In another vivid sign that retailing was rough last year, The May Department Stores Co. on Thursday posted a drop in yearly earnings per share -- its first in 27 years.
Although May Co.'s profits for the fourth quarter and year dropped by percentages in the mid-teens, the results still matched Wall Street's dour expectations.
Discounters, on the other hand, reportedly fared well in last year's economic downslide, while many major specialty and department stores are expected to show weak fourth-quarter earnings statements, slated for release over the next several weeks. As A.G. Edwards analyst Robert Buchanan, observed: "It's going to be feast or famine in retailing."
However, according to Merrill Lynch analyst Stacy Turnof, with retailers' expectations already lowered, "most are going to be in line or a few pennies [per share] better than expected at this point."
Fourth-quarter profits for May Co. dropped 16.8 percent, to $431 million, or $1.36 a diluted share, from $518 million, or $1.59, a year ago.
Shares of May Co. slid 26 cents to close Thursday at $35.44 on the New York Stock Exchange.
Revenues for the period ended Feb. 2 shrank 7.1 percent, to $4.65 billion, compared with $5 billion a year ago. Comparable-store sales for the quarter fell 6.9 percent.
Chairman and chief executive officer Gene Kahn, in a statement, said, it was a "challenging" year for the company, industry and nation. May Co., he said, "performed admirably" in the face of "an economic recession, a national disaster and unseasonably warm weather throughout the country during the holiday season."
For the full year, earnings retreated 18.1 percent, to $703 million, or $2.21 a diluted share, from $858 million, or $2.62, last year. Those results include a third-quarter aftertax extraordinary loss of $3 million, or 1 cent a share.
For the year, sales dipped 2.3 percent, to $14.18 billion against $14.51 billion. Comps were off 4.6 percent.
Although Kahn said he was "clearly not satisfied" with the firm's top and bottom lines in 2001, he did point out some positives. He said the company was "more intensely merchandise-driven and focused on offering customers the right choices of merchandise." The strategy was supported with a new regular-price, lifestyle branding campaign that made its debut in fall 2001, he said.
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