The May Department Stores preliminary net sales were $817.9 million for the four-week period ended July 31, 2004, a 5.3% decrease from $863.4 million in the similar period last year. Store-for-store sales decreased 5.5%. July store-for-store sales decreased 5.0%, excluding the remaining 15 stores that May previously announced it will divest.

July sales were affected by a timing change in the Texas sales tax holiday and the related movement of a major end-of-week sales promotion event at the Foley's division from the last week of July 2003 to the first week of August 2004. This shift reduced May's total store-for-store sales in July by an estimated 3.5%.

Net sales for the second quarter of fiscal 2004 were $2.96 billion, a 1.5% decrease, compared with $3.00 billion during the second quarter of fiscal 2003.

For the first six months of fiscal 2004, net sales were $5.92 billion, a 0.8% increase, compared with $5.87 billion during the first six months of fiscal 2003.

  Net sales were as follows:

                           Fiscal   Fiscal   Percent   Store-for-Store Inc.
   (dollars in millions)    2004     2003   Inc./(Dec.)     /(Dec.)
                                                       Actual     Adjusted *
    July                  $817.9    $863.4     (5.3)%   (5.5)%      (5.0)%
    Second quarter       2,955.6   3,000.3     (1.5)    (2.2)       (1.6)
    Year-to-date         5,918.5   5,872.9      0.8     (0.2)        0.4

   * Excludes the remaining 15 stores that May previously announced it will

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 exclude sales of stores closed during both years.

Ladies' fashion accessories continued to perform well, led by signature handbags, small leathers, and sunglasses. Early Fall sales got off to a good start, reflecting the resurgence in demand for career and dressier looks in both ladies' and men's, as well as the importance of denim and premium denim in all categories. Apparel clearance, however, which is a key July sales driver, fell short of our expectations. Although home décor product, luggage, and mattresses achieved sales increases, the balance of home furnishings lagged behind overall store performance.

During July, May's Bridal Group opened two David's Bridal stores in California and two After Hours Formalwear stores in North Carolina and Tennessee. Year-to-date, the Bridal Group opened 10 David's Bridal stores and seven After Hours stores. An additional 20 David's Bridal stores and 13 After Hours stores will open by year-end.

One new department store opened in the first half of 2004 — a Hecht's store in Wilmington, N.C. Seven additional department stores will open by year-end: two Foley's stores in Houston and El Paso, Texas; a Filene's store in Dartmouth, Mass.; a Hecht's store in Nashville, Tenn.; a Meier & Frank store in Portland, Ore.; a Robinsons-May store in Rancho Cucamonga, Calif.; and a store for The Jones Store in Kansas City, Kan.

May completed its acquisition of Marshall Field's effective July 31, 2004. Beginning August 1, 2004, Marshall Field's sales will be included in the company's reporting.