<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 3, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ______________
Commission file number 1-10767
VALUE CITY DEPARTMENT STORES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 31-1322832
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3241 Westerville Road, Columbus, Ohio 43224
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 471-4722
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past
90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at June 6, 1997
- ----------------------------------- ---------------------------------
Common Stock, Without Par Value 31,767,945 Shares
<PAGE> 2
VALUE CITY DEPARTMENT STORES, INC.
TABLE OF CONTENTS
================================================================================
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I. FINANCIAL INFORMATION (UNAUDITED)
Item 1. Financial Statements
Consolidated Balance Sheets
May 3, 1997 and August 3, 1996 3
Consolidated Statements of Income
Three months and nine months ended May 3, 1997
and May 4, 1996 4
Consolidated Statements of Cash Flows
Nine months ended May 3, 1997
and May 4, 1996 5
Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities N/A
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders N/A
Item 5. Other Information N/A
Signatures 11
Item 6. Exhibits and Reports on Form 8-K
Part A: Exhibit 11 Statements Regarding Computation of Per Share Earnings 12
Exhibit 27 Financial Data Schedule for Third Quarter Form 10-Q 14
Part B: Reports on Form 8-K A Form 8-K was filed on May 27, 1997 relating
To Item 4 - "Changes in Registrant's Certifying Accountant." *
</TABLE>
* Previously filed
page 2
<PAGE> 3
VALUE CITY DEPARTMENT STORES, INC.
PART 1. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
MAY 3, AUGUST 3,
1997 1996
------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 10,621 $ 10,484
Accounts receivable, net 5,121 4,525
Receivables from affiliates 886 769
Inventories 275,399 261,370
Prepaids and other 10,507 8,569
Deferred income taxes 9,753 8,928
------- -------
Total current assets 312,287 294,645
Property and equipment, at cost:
Furniture, fixtures and equipment 143,828 129,081
Leasehold improvements 96,046 78,217
Land and building 5,137 4,100
Capital leases 15,271 8,973
-------- --------
260,282 220,371
Accumulated depreciation and amortization (100,945) (87,610)
-------- --------
Property and equipment, net 159,337 132,761
Notes receivable, non-current 2,485 2,613
Other assets 7,358 6,991
-------- --------
Total assets $481,467 $437,010
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $65,609 $70,711
Accounts payable to affiliates 12,456 7,402
Demand note payable 26,000 -
Accrued expenses:
Compensation 7,116 9,056
Taxes 11,522 12,216
Other 16,532 23,027
Current maturities of long-term obligations 12,419 10,836
-------- --------
Total current liabilities 151,654 133,248
Long-term obligations, net of current maturities 57,746 46,942
Deferred income taxes and other non-current liabilities 5,883 4,448
Excess net assets over cost of acquired business - 927
Shareholders' equity:
Common shares, without par value; 80,000,000 authorized;
issued, including Treasury Shares, 32,130,045 shares and
32,058,745 shares, respectively 110,000 109,450
Contributed capital 9,782 9,688
Retained earnings 149,283 135,504
Less deferred compensation expense, net (52) (368)
Treasury shares at cost, 368,600 shares (2,829) (2,829)
-------- --------
Total shareholders' equity 266,184 251,445
-------- --------
Total liabilities and shareholders' equity $481,467 $437,010
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
page 3
<PAGE> 4
VALUE CITY DEPARTMENT STORES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------ -----------------------
MAY 3, MAY 4, MAY 3, MAY 4,
1997 1996 1997 1996
13 WEEKS 13 WEEKS 39 WEEKS 40 WEEKS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales, excluding sales of
licensed departments $233,660 $207,620 $822,731 $721,800
Cost of sales (153,686) (131,437) (526,011) (451,010)
-------- --------- -------- ---------
Gross profit 79,974 76,183 296,720 270,790
Selling, general and administrative expenses (91,825) (79,434) (287,501) (252,333)
License fees from affiliates,
and other operating income 4,990 4,340 15,832 13,829
-------- -------- -------- --------
Operating (loss) profit (6,861) 1,089 25,051 32,286
Interest (expense) income, net (1,271) 13 (3,612) (637)
Amortization of excess net assets over cost 232 348 927 1,043
Other income, net 4 4 138 47
-------- -------- -------- --------
(Loss) income before income taxes and
minority interest (7,896) 1,454 22,504 32,739
Minority interest in partnerships - - - (41)
-------- -------- -------- --------
(Loss) income before benefit (provision)
for income taxes (7,896) 1,454 22,504 32,698
Benefit (provision) for income taxes 3,034 (556) (8,725) (13,127)
------- -------- -------- --------
Net (loss) income $ (4,862) $ 898 $ 13,779 $ 19,571
======== ======== ======== ========
(Loss) earnings per share $ (0.15) $ 0.03 $ 0.43 $ 0.62
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
page 4
<PAGE> 5
VALUE CITY DEPARTMENT STORES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------
MAY 3, MAY 4,
1997 1996
39 WEEKS 40 WEEKS
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $13,779 $19,571
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 21,865 17,323
Amortization of excess net assets over cost (927) (1,043)
Deferred income taxes and other non-current liabilities 610 (3,534)
Minority interest in partnerships - 41
Gain on disposal of property and equipment (138) (47)
Change in working capital, assets and liabilities:
Receivables (713) (650)
Inventories (14,029) (41,192)
Prepaids and other (7,203) (502)
Accounts payable (48) 35,251
Accrued expenses (5,380) 3,552
------- --------
Net cash provided by operating activities 7,816 28,770
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (40,435) (24,203)
Proceeds from sale of property and equipment 62 50
Other assets (718) (1,292)
Notes receivable, non-current 128 (1,966)
------- -------
Net cash used in investing activities (40,963) (27,411)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) borrowings under demand note facility (7,000) 9,000
Proceeds from issuance of long-term obligations 50,000 -
Principal payments of long-term obligations (10,266) (10,602)
Net proceeds from issuance of common shares 550 -
Purchase of treasury shares - (1,598)
Distributions to partners in minority partnerships, net - (1,328)
-------- -------
Net cash provided by (used in) financing activities 33,284 (4,528)
-------- -------
Net increase (decrease) in cash and equivalents 137 (3,169)
Cash and equivalents, beginning of period 10,484 17,374
------- -------
Cash and equivalents, end of period $10,621 $14,205
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
page 5
<PAGE> 6
VALUE CITY DEPARTMENT STORES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED MAY 3, 1997 AND MAY 4, 1996
(UNAUDITED)
================================================================================
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Value City Department Stores, Inc. ("VCDS") and its wholly owned
subsidiaries. These entities are herein referred to collectively as the
"Company." The Company operates a chain of full-line off-price department
stores, principally under the name "Value City."
The consolidated financial statements as of and for the periods ended May
3, 1997 and May 4, 1996 are unaudited and are presented pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, the consolidated financial statements should be read in
conjunction with the financial statement disclosures contained in the
Company's 1996 Annual Report. In the opinion of management, the
accompanying consolidated financial statements reflect all adjustments
necessary (which are of a normal recurring nature) to present fairly the
financial position and results of operations and cash flows for the interim
periods presented, but are not necessarily indicative of the results of
operations for a full fiscal year.
To facilitate comparisons with the current period, certain amounts in prior
year financial statements have been reclassified to conform to the current
year presentation.
2. FISCAL YEAR
In 1996, the Company changed its fiscal year end to the Saturday closest to
July 31 to conform to the National Retail Federation's suggested retail
calendar. As a result, the month of January 1996 had five rather than four
weeks, and fiscal year 1996 had 53 rather than 52 weeks.
3. CREDIT FACILITY AND LONG-TERM OBLIGATIONS
The Company has a $100.0 million credit facility with its bank bearing
interest at or below the prime lending rate depending on certain borrowing
elections made by the Company. At May 3, 1997, the prime rate was 8.5%,
direct borrowings aggregated $26.0 million, $17.5 million of letters of
credit were issued and outstanding for merchandise purchases, leaving $56.5
million available under the facility. During the second quarter the Company
completed a private placement for $50.0 million of senior unsecured notes
and used the proceeds to repay demand notes payable. The senior unsecured
notes require principal payments of $2.1 million in December 1997 and 1998
and payments of $9.1 million annually beginning December 1, 1999 through
December 1, 2003 and bear interest at an average fixed rate of 7.22% per
annum.
4. RECENT ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board ("FASB") periodically issues
Statements on Financial Accounting Standards ("SFAS"), some of which
require implementation by a date falling within or after the close of the
Company's fiscal year.
SFAS No. 128 - "Earnings Per Share" specifies the computation, presentation
and disclosures for basic and dilutive earnings per share and is effective
for the second quarter of fiscal year 1998. The adoption of SFAS No. 128 is
not expected to have a significant impact on the financial statements of
the Company.
page 6
<PAGE> 7
VALUE CITY DEPARTMENT STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
================================================================================
THREE MONTHS ENDED MAY 3, 1997 COMPARED TO THREE MONTHS ENDED MAY 4, 1996
Net sales increased from $207.6 million to $233.7 million, an increase of
approximately $26.1 million or 12.5%. For the current quarter, new stores
contributed an increase in sales of $24.1 million and stores opened during
the prior year not yet considered comparable contributed an increase of
$7.3 million. Comparable store sales decreased $5.3 million or 2.6%.
Gross profit increased from $76.2 million to $80.0 million, an increase of
$3.8 million, or 5.0%. Expressed as a percentage of sales, gross profit
decreased from 36.7% to 34.2%, due primarily to higher markdowns than last
year, especially in the area of overstocked merchandise.
Selling, general and administrative expenses ("SG&A") increased $12.4
million, or 15.6% from $79.4 million to $91.8 million, and increased as a
percentage of sales from 38.3% to 39.3%. New stores contributed an increase
in expenses of $9.2 million, and stores opened during the prior fiscal year
that are not yet considered comparable contributed an increase of $2.9
million. All other expenses as a group increased $0.3 million. The
increase in SG&A as a percentage of sales is primarily attributable to new
store expenses which are significantly higher than that of comparable
stores due primarily to pre-opening expenses and the result of aggressive
advertising to develop name recognition in new markets.
Based upon its past experience, the Company estimates the average cost of
opening a new store to range from approximately $5.0 million to $6.5
million, including leasehold improvements, fixtures, inventory and other
costs. Preparations for opening a store generally take between eight and
twelve weeks. The Company charges pre-opening expenses to operations
ratably over the first twelve months of store operations. It has been the
Company's experience that new stores generally achieve profitability and
contribute to net income after the first full year of operations. Thirteen
stores opened less than twelve months had a pre-tax net operating loss of
$4.6 million for the current three month period, including $1.8 million of
pre-opening expense amortization. Seven stores opened less than twelve
months during last year's three month period had pre-tax operating loss of
$1.0 million, including $1.2 million of pre-opening expense amortization.
License fees from affiliates and other operating income increased from $4.3
million to $5.0 million, an increase of $0.7 million or 15.0%, and remained
constant as a percentage of sales at 2.1%.
Operating profit decreased from $1.1 million to a loss of $6.9 million, a
decrease of approximately $8.0 million as a result of the above factors.
Interest expense, net of interest income, increased from income of $13,000
to expense of $1.3 million due primarily to increased borrowings.
Income before income taxes decreased from $1.5 million to a loss of $7.9
million, a decrease of $9.4 million as a result of the above factors.
page 7
<PAGE> 8
VALUE CITY DEPARTMENT STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
================================================================================
NINE MONTHS ENDED MAY 3, 1997 COMPARED TO NINE MONTHS ENDED MAY 4, 1996
Net sales increased from $721.8 million to $822.7 million, an increase of
$100.9 million or 14.0%. Due to the prior year's change in the Company's
fiscal year end to the Saturday closest to July 31, the nine months ended
May 4, 1996 had forty rather than thirty-nine weeks and began one week
earlier than this year's nine month period. For the current thirty-nine
week period, new stores contributed an increase in sales of $75.2 million
and stores opened during the prior year that are not yet considered
comparable contributed an increase of $34.3 million. Comparable store sales
increased $6.5 million or 1.0% when considering like thirty-nine week
periods. The remainder of the change was a decrease of $15.1 million which
resulted from the extra week in last year's period.
Gross profit increased from $270.8 million to $296.7 million, an increase
of $25.9 million, or 9.6%. Expressed as a percentage of sales, gross profit
decreased from 37.5% to 36.1%, due primarily to less favorable physical
inventory variance than last year, lower initial mark-up and higher
markdowns than last year, especially in the area of overstocked
merchandise.
SG&A increased $35.2 million, or 13.9% from $252.3 million to $287.5
million, but decreased slightly as a percentage of sales from 35.0% to
34.9%. New stores contributed an increase in expenses of $23.4 million, and
stores opened during the prior fiscal year that are not yet considered
comparable contributed an increase of $11.4 million. All other expenses as
a group increased $0.4 million. The decrease in SG&A as a percentage of
sales is primarily attributable to decreases in comparable store
advertising expense.
Thirteen stores opened less than twelve months had a pre-tax net operating
loss of $2.8 million for the current nine month period, including $4.8
million of pre-opening expense amortization. Seven stores opened less than
twelve months during last year's nine month period had pre-tax operating
loss of $0.9 million, including $2.8 million of pre-opening expense
amortization.
License fees from affiliates and other operating income increased from
$13.8 million to $15.8 million, an increase of approximately $2.0 million
or 14.5%, but remained constant as a percentage of sales at 1.9%.
Operating profit decreased from $32.3 million to $25.1 million, a decrease
of approximately $7.2 million or 22.4%, and decreased as a percentage of
sales from 4.5% to 3.0% as a result of the above factors.
Interest expense, net of interest income, increased from $0.6 million to
$3.6 million due primarily to increased borrowings.
Other income, net, increased from $47,000 to $138,000, due primarily to a
non-cash gain on termination of a capital lease for transportation
equipment.
Income before income taxes decreased from $32.7 million to $22.5 million, a
decrease of $10.2 million or 31.2% and decreased as a percentage of sales
from 4.5% to 2.7% as a result of the above factors.
page 8
<PAGE> 9
VALUE CITY DEPARTMENT STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
================================================================================
LIQUIDITY AND CAPITAL RESOURCES
Net working capital was $160.6 million at May 3, 1997 compared to $161.4
million at August 3, 1996. Current ratios at those dates were 2.06 and 2.21,
respectively.
Net cash provided by operating activities totaled $7.8 million and $28.8
million for the nine months ended May 3, 1997 and May 4, 1996. Net income,
adjusted for depreciation and amortization, provided $35.6 million of
operating cash flow for the nine months ended May 3, 1997. In addition,
operating cash flow was decreased by $14.1 million representing an increase
in inventories net of a decrease in accounts payable of $48,000. For the
nine months ended May 4, 1996, net income, adjusted for depreciation and
amortization, provided $36.9 million of operating cash flow and was
decreased by $5.9 million representing an increase in inventories net of an
increase in accounts payable of $35.3 million.
Net cash used in investing activities totaled $41.0 million for the 1997
period and $27.4 million for the 1996 period. Capital expenditures for new
stores aggregated $28.7 million, including $1.0 million for the purchase of
land associated with a new store. Other capital expenditures during the nine
months include $5.8 million for capital improvements in existing stores,
$0.3 million for energy management systems, $3.9 million for renovations in
existing warehouses, $0.1 million for transportation equipment, and $1.6
million for M.I.S. equipment upgrades. Other investing activities include
cash outlays of $0.7 million primarily for new store lease acquisition costs
and point of sale and other equipment to be used for future store openings,
partially offset by $0.1 million of proceeds from notes receivable.
Capital expenditures for the balance of the fiscal year are estimated at
approximately $9.0 million.
The Company has a $100.0 million credit facility with its bank bearing
interest at or below the prime lending rate depending on certain borrowing
elections made by the Company. At May 3, 1997, the prime rate was 8.5%,
direct borrowings aggregated $26.0 million, $17.5 million of letters of
credit were issued and outstanding for merchandise purchases, leaving $56.5
million available under the facility. During the second quarter the Company
completed a private placement for $50.0 million of senior unsecured notes
and used the proceeds to repay demand notes payable. The senior unsecured
notes require principal payments of $2.1 million in December 1997 and 1998
and payments of $9.1 million annually beginning December 1, 1999 through
December 1, 2003 and bear interest at an average fixed rate of 7.22% per
annum. The Company believes that the cash generated by its operations, along
with the available proceeds from the credit facility will be sufficient to
meet its future obligations including capital expenditures.
SEASONALITY
The Company's business is affected by the pattern of seasonality common to
most retail businesses. Historically, the majority of its sales and
operating profit have been generated during the first six months of its
fiscal year, which includes the back-to-school and Christmas selling
seasons.
FISCAL YEAR
In 1996, the Company changed its fiscal year end to the Saturday closest to
July 31 to conform to the National Retail Federation's suggested retail
calendar. As a result, the month of January 1996 had five rather than four
weeks, and fiscal year 1996 had 53 rather than 52 weeks.
page 9
<PAGE> 10
VALUE CITY DEPARTMENT STORES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
================================================================================
INCOME TAXES
Income taxes are computed in accordance with SFAS No. 109, "Accounting for
Income Taxes." The effective tax rate for the nine months ended May 3, 1997
was 38.8%. The effective tax rate for the nine months ended May 4, 1996 was
40.1%. The 1.3% reduction results primarily from work opportunity tax
credits and lower state income taxes.
INFLATION
The results of operations and financial condition are presented based upon
historical cost. While it is difficult to accurately measure the impact of
inflation because of the nature of the estimates required, management
believes that the effect of inflation, if any, on the results of operations
and financial condition has been minor.
RECENT ACCOUNTING PRONOUNCEMENT
The Financial Accounting Standards Board ("FASB") periodically issues
Statements on Financial Accounting Standards ("SFAS"), some of which require
implementation by a set date falling within of after the close of the
Company's fiscal year.
SFAS No. 128 - "Earnings Per Share" specifies the computation, presentation
and disclosures for basic and dilutive earnings per share and is effective
for the second quarter of fiscal year 1998. The adoption of SFAS No. 128 is
not expected to have a significant impact on the financial statements of the
Company.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Company cautions that any forward-looking statements (as such term is
defined in the Private Securities Litigation Reform Act of 1995) contained
herein or made by management of the Company involve risks and uncertainties,
and are subject to change based on various important factors. The following
factors, among others, in some cases have affected and in the future could
affect the Company's financial performance and actual results and could
cause actual results for 1997 and beyond to differ materially from those
expressed or implied in any such forward-looking statements: changes in
consumer spending patterns, consumer preferences and overall economic
conditions, the impact of competition and pricing, changes in weather
patterns, changes in existing or potential duties, tariffs or quotas, paper
and printing costs, availability of suitable store locations at appropriate
terms and ability to hire and train associates.
page 10
<PAGE> 11
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 thereunto duly authorized.
VALUE CITY DEPARTMENT STORES, INC.
(Registrant)
By /s/ ROBERT M. WYSINSKI
------------------------------------------
Robert M. Wysinski, Senior Vice President,
Chief Financial Officer, Treasurer
And Secretary *
Date: June 16, 1997
- -------------------
- --------------------------------------------------------------------------------
* Mr. Wysinski is the principal financial officer and has been duly authorized
to sign on behalf of the registrant.
page 11
<PAGE> 1
VALUE CITY DEPARTMENT STORES, INC.
EXHIBIT 11
STATEMENTS REGARDING COMPUTATION OF PER SHARE EARNINGS
================================================================================
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
MAY 3, MAY 4,
1997 1996
----------- ------------
<S> <C> <C>
Weighted average number of common shares outstanding 31,742,187 31,682,145
Add net shares issuable pursuant to stock option plans less
shares assumed repurchased at the average market price 126,504 116,212
----------- ------------
Number of shares for computation of primary earnings per share 31,868,691 31,798,357
Add net shares issuable pursuant to stock option plans less
shares assumed repurchased at period end market price 8,971 152,766
---------- ------------
Number of shares for computation of fully diluted
earnings per share 31,877,662 31,951,123
=========== ============
Net (loss) income for primary and fully diluted earnings per share $(4,862,000) $ 898,000
=========== ============
(Loss) earnings per share - primary and fully diluted $(0.15) $0.03
=========== ============
</TABLE>
page 12
<PAGE> 2
VALUE CITY DEPARTMENT STORES, INC.
EXHIBIT 11
STATEMENTS REGARDING COMPUTATION OF PER SHARE EARNINGS
================================================================================
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------
MAY 3, MAY 4,
1997 1996
39 WEEKS 40 WEEKS
----------- -----------
<S> <C> <C>
Weighted average number of common shares outstanding 31,721,847 31,734,503
Add net shares issuable pursuant to stock option plans less
shares assumed repurchased at the average market price 337,008 38,988
----------- -----------
Number of shares for computation of primary earnings per share 32,058,855 31,773,491
Add net shares issuable pursuant to stock option plans less
shares assumed repurchased at period end market price 75,988 50,922
----------- -----------
Number of shares for computation of fully diluted
earnings per share 32,134,843 31,824,413
=========== ===========
Net income for primary and fully diluted earnings per share $13,779,000 $19,571,000
=========== ===========
Earnings per share - primary $0.43 $0.62
=========== ===========
Earnings per share - fully diluted $0.43 $0.61
=========== ===========
</TABLE>
page 13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-02-1997
<PERIOD-START> AUG-04-1996
<PERIOD-END> MAY-03-1997
<CASH> 10,621
<SECURITIES> 0
<RECEIVABLES> 5,524
<ALLOWANCES> 403
<INVENTORY> 275,399
<CURRENT-ASSETS> 312,287
<PP&E> 260,282
<DEPRECIATION> 100,945
<TOTAL-ASSETS> 481,467
<CURRENT-LIABILITIES> 151,376
<BONDS> 57,746
0
0
<COMMON> 110,000
<OTHER-SE> 156,462
<TOTAL-LIABILITY-AND-EQUITY> 481,467
<SALES> 822,731
<TOTAL-REVENUES> 822,731
<CGS> 526,011
<TOTAL-COSTS> 526,011
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 407
<INTEREST-EXPENSE> 3,612
<INCOME-PRETAX> 22,504
<INCOME-TAX> 8,725
<INCOME-CONTINUING> 13,779
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,779
<EPS-PRIMARY> 0.43
<EPS-DILUTED> 0.43
</TABLE>
