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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 24, 2000
Date of earliest event reported: February 3, 2000
THE MAY DEPARTMENT STORES COMPANY
(Exact name of Registrant as specified in its charter)
Delaware I-79 43-1104396
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
611 Olive Street, St. Louis, Missouri 63101
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(314) 342-6300
Page 1
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Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following documents are filed as Exhibits.
Exhibit No. Exhibit
99.1 Press Release dated February 3, 2000
99.2 Press Release dated February 10, 2000
Page 2
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
THE MAY DEPARTMENT STORES COMPANY
Dated: February 24, 2000 By: /s/ Richard A. Brickson
Richard A. Brickson
Secretary and Senior Counsel
Page 3
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INDEX TO EXHIBITS
Exhibit No. Exhibit
99.1 Press Release dated February 3, 2000
99.2 Press Release dated February 10, 2000
Page 4
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EXHIBIT NO. 99.1
JANUARY SALES INCREASE 4.6% FOR
THE MAY DEPARTMENT STORES COMPANY
ST. LOUIS, February 3, 2000 -- The May Department Stores
Company [NYSE:MAY] today reported preliminary sales of $679.1
million for the four-week period ended January 29, 2000, a 4.6%
increase over $649.5 million in the similar period a year ago.
Store-for-store sales increased 2.3%. The company discontinued its
consumer electronics business at the beginning of fiscal 1999. This
penalizes sales figures by about 1% throughout the year.
Sales for fiscal 1999 were $13.87 billion, an increase of 6.3%
over sales of $13.05 billion in fiscal 1998.
Sales were as follows:
JANUARY AND YEAR-TO-DATE SALES (Millions)
Fiscal Fiscal Percent Store-for-Store*
1999 1998 Increase Increase
January $ 679.1 $ 649.5 4.6% 2.3%
Year-to-date $13,869.4 $13,047.7 6.3% 2.6%
*Store-for-store sales represent sales of those stores open during
both years.
Sales have been restated to exclude the sales of stores that
have been closed and not replaced. Revenues, including sales of
nonreplaced closed stores and finance charge revenue, were $14.22
billion in 1999 and $13.41 billion in 1998.
May completed opening its 18 planned new stores for 1999 in
November. The new stores include five Lord & Taylor stores, two
Hecht's stores, one Strawbridge's store, two Robinsons-May stores,
two Filene's stores, two Kaufmann's stores, three Famous-Barr
stores, and one The Jones Store location.
The Meier & Frank division also opened 13 ZCMI stores,
acquired last month, on January 31, 2000. The stores are located in
Utah and Idaho.
The May Department Stores Company operates 421 department
stores in 36 states and the District of Columbia.
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EXHIBIT NO. 99.2
MAY REPORTS 25TH CONSECUTIVE YEAR OF
RECORD SALES AND EARNINGS PER SHARE:
EARNINGS PER SHARE INCREASE 13.0%;
ANNOUNCES ADDITIONAL $650 MILLION STOCK REPURCHASE;
BOARD INCREASES DIVIDEND 4.5%
ST. LOUIS, February 10, 2000 -- The May Department Stores
Company [NYSE:MAY] today announced the company's 25th consecutive
year of record sales and earnings per share for fiscal 1999, which
ended January 29, 2000. Diluted earnings per share increased 13.0%
to a record $2.60, versus $2.30 in 1998. Net earnings increased to
$927 million from $849 million a year ago. Sales for fiscal 1999
increased 6.3% to $13.87 billion, versus $13.05 billion in 1998.
Comparable-store sales were up 2.6% for the fiscal 1999 year. May
discontinued its consumer electronics business in 1999, which
penalized sales comparisons by about 1% for the year.
Fiscal 1999 included a record fourth quarter. Diluted earnings
per share for the 13 weeks were $1.45, up 10.7% compared with $1.31
a year ago. Net earnings for the quarter were $513 million,
compared with $478 million in the same period in 1998. Fourth
quarter sales were $4.70 billion, an increase of 4.0% compared with
$4.52 billion in 1998.
May's board of directors authorized a 4.5% increase in May's
annual dividend rate payable March 15, 2000, to shareowners of
record as of March 1, 2000. The new annual dividend rate is 93
cents per share versus 89 cents per share in 1999. This is the 25th
consecutive year of dividend increases, and marks 89 years of
uninterrupted dividends.
The board also authorized the company to repurchase an
additional $650 million of May's shares. This continuing program
has authorized May to purchase more than $2.5 billion of stock
since 1996. In addition to the $650 million authorization, $139
million of the 1999 repurchase program remains to be executed. The
company expects to make the purchases through open-market
transactions.
In announcing the results, Gene Kahn, May's president and
chief executive officer, said, "In addition to the record results
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we reported for the fourth quarter and year, 1999 was also
significant because:
-- "May achieved a 24.1% return on equity. The return
continues to place May well in the top quartile of the retail
industry.
-- "Our cash flow of $1.4 billion and strong financial
position are significant assets, giving us the ability to take full
advantage of the right opportunities to make acquisitions, add new
stores, expand existing stores, and purchase our stock. The board
authorized a stock repurchase of up to $650 million of May's
shares, for a total of more than $2.5 billion in purchase
authorizations since 1996.
-- "We opened 18 department stores in 1999: five Lord & Taylor
stores, two Hecht's stores, one Strawbridge's store, two
Robinsons-May stores, two Filene's stores, two Kaufmann's stores,
three Famous-Barr stores, and one The Jones Store location. The
stores added 2.5 million square feet of selling space.
-- "The Meier & Frank division also opened 13 ZCMI stores on
January 31, 2000, bringing us to a total of 421 stores. In addition
to the ZCMI stores, we will open 10 new stores in 2000 -- four Lord
& Taylor stores, four Foley's stores, a Kaufmann's store, and a
Famous-Barr store -- for a total of 23 new stores and 3.3 million
square feet of new selling space.
-- "In terms of our management team, we named John L. Dunham
a vice chairman in 1999, and last week we promoted Richard W.
Bennet III and William P. McNamara to vice chairmen of May. Anthony
J. Torcasio continues as a vice chairman until his retirement at
the end of September. Rick, Bill, and Tony will supervise the
company's store divisions. Judith K. Hofer was promoted to
president and chief executive officer of May Merchandising Company.
We are fortunate to have these talented, career May executives
prepared to take on these important responsibilities."
Continuing, Mr. Kahn emphasized, "May will concentrate its
efforts on becoming a more merchandise-driven, sales-driven
company. Our important initiatives of capturing the younger
shoppers and addressing the casualization of the American consumer
will be propelled by building stronger, more interesting selections
and better values that communicate youth, newness, fun, and
excitement to a broad range of customers."
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The May Department Stores Company operates 421 department
stores in 36 states and the District of Columbia.
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THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED RESULTS OF OPERATIONS
52 Weeks Ended
January 29, 2000 January 30, 1999
(dollars in millions, % to % to
except per share) $ Revenues $ Revenues
Net retail sales $13,869 $13,048
Revenues $14,224 $13,413
Cost of sales (A) 9,728 68.4% 9,224 68.8%
Selling, general and
administrative expenses 2,686 18.9 2,516 18.7
Interest expense, net 287 2.0 278 2.1
Earnings before income taxes 1,523 10.7 1,395 10.4
Provision for income taxes 596 39.1* 546 39.1*
Net earnings $ 927 6.5% $ 849 6.3%
Diluted earnings per share $ 2.60 $ 2.30
Dividends paid per
common share $ .89 $ .84-2/3
Diluted average shares
and equivalents 355.6 367.4
Unaudited
13 Weeks Ended
January 29, 2000 January 30, 1999
(dollars in millions, % to % to
except per share) $ Revenues $ Revenues
Net retail sales $ 4,698 $ 4,517
Revenues $ 4,789 $ 4,618
Cost of sales (A) 3,123 65.2% 3,042 65.9%
Selling, general and
administrative expenses 757 15.8 720 15.6
Interest expense, net 74 1.6 77 1.6
Earnings before income tax 835 17.4 779 16.9
Provision for income taxes 322 38.5* 301 38.5*
Net earnings $ 513 10.7% $ 478 10.4%
Diluted earnings per share $ 1.45 $ 1.31
Dividends paid per
common share $ .22-1/4 $ .21-1/6
Diluted average shares
and equivalents 352.6 359.3
* Percent represents effective income tax rate.
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(A) Merchandise inventories are stated on the LIFO (last-in,
first-out) cost basis. The 1999 LIFO provision decreased cost of
sales by $30 million, or 0.2% of revenues, versus a $28 million
decrease, or 0.2% of revenues in 1998. The 1999 fourth quarter LIFO
provision decreased cost of sales by $50 million, or 1.0% of
revenues, versus a $48 million decrease, or 1.0% of revenues in the
1998 fourth quarter.
Cost of sales excluding the impact of LIFO (on a first-in,
first-out basis) was 68.6% of revenues in 1999, versus 69.0% of
revenues in 1998. The 1999 fourth quarter cost of sales excluding
the impact of LIFO was 66.2% of revenues, versus 66.9% of
revenues in the 1998 fourth quarter.
Net Retail Sales - Percent Increase from Prior Year
Net retail sales represent the sales of stores operating at the end
of the latest period. Consumer electronics was discontinued at the
beginning of 1999. This penalized sales by about 1% throughout
1999. Sales exclude finance charge revenues and the sales of stores
that have been closed and not replaced. Store-for-store sales
represent sales of those stores open during both periods.
52 Weeks Ended 13 Weeks Ended
January 29, 2000 January 29, 2000
Store-for- Store-for-
Total Store Total Store
6.3% 2.6% 4.0% 1.6%
THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in millions)
January 29, January 30,
ASSETS 2000 1999
Cash $ 16 $ 15
Cash equivalents 25 97
Accounts receivable, net 2,173 2,144
Merchandise inventories 2,817 2,655
Other current assets 84 76
Total Current Assets 5,115 4,987
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Property and equipment, net 4,769 4,513
Goodwill and other assets 1,051 1,033
Total Assets $ 10,935 $ 10,533
LIABILITIES AND January 29, January 30,
SHAREOWNERS' EQUITY 2000 1999
Current maturities
of long-term debt $ 259 $ 98
Accounts payable 1,030 965
Accrued expenses 892 807
Income taxes payable 234 189
Total Current Liabilities 2,415 2,059
Long-term debt 3,560 3,825
Deferred income taxes 540 482
Other liabilities 314 309
ESOP Preference Shares 315 327
Unearned compensation (286) (305)
Shareowners' equity 4,077 3,836
Total Liabilities and
Shareowners' Equity $ 10,935 $ 10,533
NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
Inventories. Merchandise inventories are stated on the LIFO
(last-in, first-out) cost basis. The LIFO provision was a credit of
$30 million in 1999 compared with a credit of $28 million in 1998.
The accumulated LIFO provision was $35 million and $65 million in
1999 and 1998, respectively.
Acquisition. On December 31, 1999, May completed the acquisition of
Zions Co-operative Mercantile Institution (ZCMI) stores. May's
Meier & Frank division opened the 13 ZCMI stores, located in Utah
and Idaho, on January 31, 2000. The transaction, which was
accounted for as a purchase, did not have a material impact on
May`s financial statements.
Stock Repurchase program. During 1999, the board of directors
authorized the repurchase of up to $552 million of May shares. As
of January 29, 2000, the company has purchased $413 million of
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common stock, or approximately 11.5 million shares at an average
price of $36 per share, which included $240 million of common stock
purchases in the fourth quarter. On February 9, 2000, the board of
directors authorized the company to repurchase up to $650 million
May common shares as market conditions allow.
Reclassification. Certain prior-period amounts have been
reclassified to conform with the current-year presentation.
THE MAY DEPARTMENT STORES COMPANY AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(Millions, except
per share) 1999 1998 1997
Net retail sales $13,869 $13,048 $12,265
Revenues $14,224 $13,413 $12,685
Operating earnings $ 1,810 $ 1,673 $ 1,578
Memo: LIFO provision (credit)
included in operating earnings (30) (28) (5)
Percent of Revenues 12.7% 12.5% 12.5%
Memo: LIFO provision (credit) (0.2) (0.2) (0.1)
Interest expense, net (287) (278) (299)
Earnings before income taxes 1,523 1,395 1,279
Provision for income taxes (596) (546) (500)
Net earnings $ 927 $ 849 $ 779
Diluted earnings per share $ 2.60 $ 2.30 $ 2.07
Net earnings as a percent of revenues 6.5% 6.3% 6.1%
Return on beginning net assets 20.7% 19.8% 18.5%
Return on shareowners'
beginning equity 24.1% 22.2% 21.2%
Dividends paid per common share $ .89 $ .85 $ .80
Annual dividend rate per common
share effective March 15, 2000 $ .93
(Millions, except per share) 1996 1995 1994
Net retail sales $11,465 $10,347 $ 9,643
Revenues $12,000 $10,952 $10,107
Operating earnings $ 1,509 $ 1,410 $ 1,312
Memo: LIFO provision (credit)
included in operating earnings (20) (53) (46)
Percent of revenues 12.6% 12.9% 13.0%
Memo: LIFO provision (credit) (0.2) (0.5) (0.4)
Interest expense, net (277) (250) (233)
Earnings before income taxes 1,232 1,160 1,079
Provision for income taxes (483) (460) (429)
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Net earnings $ 749 $ 700 $ 650
Diluted earnings per share $ 1.87 $ 1.75 $ 1.62
Net earnings as a percent of revenues 6.2% 6.4% 6.4%
Return on beginning net assets 18.8% 20.1% 20.1%
Return on shareowners'
beginning equity 19.4% 20.8% 21.3%
Dividends paid per common share $ .77 $ .74 $ .67
All years are 52-week fiscal years, except 1995 which included 53
weeks. Net retail sales for 1995 are shown on a 52-week basis for
comparability.
