May Comps Decline 3.8% at May Department Stores

The May Department Stores preliminary net sales were $978 million for the four-week period ended May 29, 2004, a 2.7% decrease from $1.01 billion in the similar period last year. Store-for-store sales decreased 3.8%. Store-for-store sales for the month of May decreased 3.1%, excluding the remaining 18 stores that May previously announced it will divest.

Sales comparisons for May 2004 reflect the shift of Memorial Day into fiscal June, as well as the related movement of a major end-of-week sales promotion event from the last week of May 2003 to the first week of June 2004.

Net sales for the first four months of fiscal 2004 were $3.94 billion, a 1.6% increase compared with $3.88 billion during the first four months of fiscal 2003.

  Net sales were as follows:
                 Fiscal    Fiscal     Percent    Store-for-Store Inc./(Dec.)
  (dollars in     2004      2003     Inc./(Dec.)     Actual  Adjusted *
   millions)
  Month of May   $977.8  $1,005.0       (2.7)%       (3.8)%      (3.1)%
  Year-to-date  3,940.7   3,877.6        1.6          0.3         1.0

   * Excludes the remaining 18 stores that May previously announced it will
     divest.

We continued to experience strong sales in ladies' accessories led by handbags, small leather goods, and sunglasses. Ladies' footwear, better sportswear, and suits achieved solid increases, reflecting the consumer's ongoing response to must-have items and dressier, put-together looks. Sales of more casual summer styles in ladies' and men's sportswear and swimwear gained momentum. Newness in skirts, cropped pants, and knit tops fueled brisk sales in apparel appealing to the young adult and junior customer, while young men's sportswear also performed well. Weaker businesses included dresses and children's. Home furnishings remained difficult.