NEW YORK — Despite robust sales in the second quarter, May Department Stores Co.’s bottom line fell sharply as the retailer took hefty charges relating to its merger with Federated Department Stores.
For the quarter ended July 30, the St. Louis-based retailer posted a 48.5 percent decline in net income to $52 million, or 16 cents a diluted share, from $101 million, or 33 cents, in the prior year on sales that jumped 16.6 percent to $3.45 billion from $2.96 billion.
For the six-month period, earnings plunged 47.5 percent to $93 million, or 29 cents, from $177 million, or 57 cents, in the prior year on sales that rose 15.1 percent to $6.82 billion from $5.92 billion.
In the second quarter, May Co. took on $63 million, or 13 cents a share, worth of charges relating to the merger with Federated, which won shareholder approval and is under antitrust regulatory review. The bulk of that charge, May Co. said in its statement, is $57 million, or 12 cents, worth of accelerated stock compensation that was released when shareholders approved the deal last month. Earnings in the quarter, though, include gains of about $26 million relating to the sales of stores as well as some income tax reductions.
The company said it wrapped up the repayment of short-term debt related to its acquisition of Marshall Field’s in 2004, and said it has $323 million in cash and cash equivalents on its balance sheet.