EXHIBIT 99.1
THE MAY DEPARTMENT STORES COMPANY REPORTS
RESULTS FOR THE FIRST QUARTER OF FISCAL 2003
ST. LOUIS, May 13, 2003 - The May Department Stores Company [NYSE: MAY]
today announced earnings per share, net earnings and net sales for the first
quarter of fiscal 2003.
For the 13 weeks ended May 3, 2003, diluted earnings per share were 23 cents,
compared with 23 cents per share in the same period a year ago. Net earnings
were $72 million, compared with $70 million in the prior year.
First quarter 2003 earnings include a $31 million or 10 cents per share tax
credit recorded upon the resolution of various federal and state income tax
issues. First quarter 2002 earnings include $40 million or 8 cents per share
of division combination costs.
First quarter net sales were $2.87 billion, a decrease of 7.2%, compared
with $3.10 billion in the 2002 first quarter. Store-for-store sales decreased
8.8% for the quarter.
May opened two new department stores during the 2003 first quarter: a Filene's
store in Brockton, Mass., and a Foley's store in Houston, Texas. Also during
the quarter, May completed the purchase of two department store locations in
Columbus, Ohio.
Nine additional department stores are planned for 2003: three Kaufmann's
stores - the two recently purchased stores in Columbus, Ohio, and one in
Pittsburgh, Pa.; two Foley's stores in Dallas, Texas, and Lake Charles, La.;
a Famous-Barr store in Columbia, Mo.; a Hecht's store in Richmond, Va.;
a Lord and Taylor store in Miami, Fla.; and a Meier & Frank store in Ogden,
Utah.
In May's Bridal Group, David's Bridal opened two stores in the first quarter.
For the balance of the year, May plans to open an additional 28 David's Bridal
stores, 15 After Hours Formalwear stores, and two Priscilla of Boston stores.
At the end of the first quarter, May operated 445 department stores under the
names of Lord & Taylor, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's,
L.S. Ayres, Meier & Frank, Robinsons-May, Strawbridge's, and The Jones Store,
as well as 183 David's Bridal stores, 235 After Hours Formalwear stores, and
10 Priscilla of Boston stores in its Bridal Group. May currently operates
in 45 states, the District of Columbia, and Puerto Rico.
This release contains forward-looking statements as defined by the Private
Securities Litigation Reform Act of 1995. While this release reflects all
available information and management's judgment and estimates of current and
anticipated conditions and circumstances and is prepared with the assistance of
specialists within and outside the company, there are many factors outside of
our control that have an impact on our operations. Such factors include but are
not limited to competitive changes, general and regional economic conditions,
consumer preferences and spending patterns, availability of adequate locations
for building or acquiring new stores, and our ability to hire and retain
qualified associates. Because of these factors, actual performance could
differ materially from that described in forward-looking statements.
CONDENSED CONSOLIDATED FINANCIAL INFORMATION FOLLOWS
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
(unaudited)
13 Weeks Ended
May 3, 2003 May 4, 2002
% to % to
(Millions, except per share) $ Net Sales $ Net Sales
Net sales $ 2,873 $ 3,096
Cost of sales 2,088 72.7% 2,203 71.2%
Selling, general, and
administrative expenses 640 22.3 658 21.2
Division combination costs 40 1.3
Interest expense, net 80 2.7 83 2.7
Earnings before income taxes 65 2.3 112 3.6
Provision (credit) for income taxes ( 7) (10.7)* 42 37.4*
Net earnings $ 72 2.5% $ 70 2.3%
Diluted earnings per share $.23 $.23
Excluding division combination costs
Net earnings $ 72 2.5% $ 95 3.1%
Diluted earnings per share $.23 $.31
Dividends paid per common share $.24 $.23-3/4
Diluted average shares
and equivalents 307.3 308.9
* Percent represents effective income tax rate.
Net Sales - Percent Decrease from Prior Year
Net sales include merchandise sales and lease department income. Store-for-store sales compare sales
of stores open during both years beginning the first day a new store has prior-year sales and excludes
sales of stores closed during both periods.
13 Weeks Ended
May 3, 2003
Store-for-
Total Store
(7.2)% (8.8)%
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(millions)
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ASSETS May 3, May 4, LIABILITIES AND May 3, May 4,
2003 2002 SHAREOWNERS' EQUITY 2003 2002
Cash and cash equivalents $ 78 $ 61 Notes payable $ 390 $ 77
Accounts receivable, net 1,536 1,690 Current maturities of
long-term debt 170 263
Merchandise inventories 3,172 3,141 Accounts payable and
Other current assets 79 61 accrued expenses 2,260 2,209
Total Current Assets 4,865 4,953 Total Current Liabilities 2,820 2,549
Property and equipment, net 5,511 5,260 Long-term debt 3,936 4,336
Goodwill and other intangibles 1,615 1,612 Deferred income taxes 794 706
Other assets 131 119 Other liabilities 368 368
ESOP preference shares 257 283
Unearned compensation (91) (152)
Shareowners' equity 4,038 3,854
Total Liabilities and
Total Assets $ 12,122 $ 11,944 Shareowners' Equity $ 12,122 $ 11,944
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions) 13 Weeks Ended
<Caption> May 3, 2003 May 4, 2002
Operating activities:
Net earnings $ 72 $ 70
Depreciation and amortization 138 133
(Increase) decrease in working capital and other (156) 21
Total operating activities 54 224
Investing activities:
Net additions to property and equipment (186) (144)
Total investing activities (186) (144)
Financing activities:
Net issuances (payments) of notes payable
and long-term debt 232 (10)
Net (purchases) issuances of common stock (4) 12
Dividend payments (73) (73)
Total financing activities 155 (71)
Increase in cash and cash equivalents 23 9
Cash and cash equivalents, beginning of period 55 52
Cash and cash equivalents, end of period $ 78 $ 61
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Interim Results
The unaudited condensed consolidated results of operations have been prepared
in accordance with the company's accounting policies as described in the 2002
Annual Report to Shareowners and should be read in conjunction with that
report. In the opinion of management, this information is fairly presented and
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair statement of the results for the interim periods have been included;
however, certain items are included in this statement based on estimates for
the entire year.
Operating results of periods which exclude the Christmas season may not be
indicative of the operating results that may be expected for the fiscal year.
Cost of Sales
For the 13 weeks ended May 3, 2003, cost of sales as a percent of net sales
increased 1.5% principally due to a 1.1% increase in occupancy costs and a
0.3% increase in the cost of merchandise.
Selling, General, and Administrative Expenses (SG&A)
SG&A expenses as a percent of net sales increased from 21.2% in the first
quarter of 2002 to 22.3% in the first quarter of 2003 due to a 0.6% increase
in payroll, a 0.3% increase in pension costs, and a 0.5% increase in other
expenses, including insurance and advertising costs, offset by a 0.3% decrease
in credit expense.
Division Combination Costs
In 2002 nonrecurring charges of $114 million or $.24 per share were recognized
related to division combinations, of which $40 million or $.08 per share were
incurred the first quarter of 2002.
Income Taxes
First-quarter 2003 income taxes are a net credit because the company recorded
a $31 million tax credit upon the resolution of various federal and state
income tax issues. Excluding the $31 million tax credit, the company's 2003
estimated effective tax rate is 37.0%
Reclassifications
Certain prior-year amounts have been reclassified to conform with the
current-year presentation.
Trailing Years' Results
Operating results excluding division combination costs for the trailing
years were as follows (millions, except per share):
52 Weeks Ended
May 3, 2003 May 4, 2002
Net sales $13,268 $13,908
Net earnings $ 595 $ 689
Diluted earnings per share $ 1.92 $ 2.18