May Stores Posts 5.6% Profit Gain

May Department Stores Co., the owner of Robinsons-May, said the parent company’s fiscal first-quarter profit rose 5.6%, its smallest gain in three quarters.

Net income increased in the quarter ended May 1 to $76 million, or 24 cents a share, from $72 million, or 23 cents, a year earlier. Sales climbed 3.1% to $2.96 billion.

Sales at stores open at least a year, a key measure of retail health, rose 1.7% in the quarter, the St. Louis-based company said.

Same-store sales fell 8.1% in April and have trailed those of Federated Department Stores Inc., owner of Macy’s and Bloomingdale’s, for 10 of the last 12 months. Chief Executive Eugene Kahn hasn’t introduced many of May’s own brands or offered as much upscale clothing as Federated and hasn’t been as aggressive in remodeling stores, investors said.

“I’m wondering if they got too complacent,” said Abhay Deshpande, an analyst at New York-based First Eagle Funds. “When others are upgrading, you can’t just sit there.”

Shares of May fell 86 cents to $27.92 on the New York Stock Exchange. They have declined 4% this year.

Excluding costs to sell or close some stores, May said it earned 26 cents a share. On that basis, analysts had forecast 27 cents, according to Thomson Financial.

May trails Sears, Roebuck & Co., J.C. Penney Co. and Federated in sales among U.S. department stores. The company is closing 34 stores, including more than a third of its Lord & Taylor locations, to focus on more-profitable locations. May had divested itself of 15 of the stores by the end of the quarter.

Federated Chief Executive Terry Lundgren has been developing and marketing more private brands, which have higher profit margins than national labels, than May, analysts have said.

Federated has also remodeled stores by adding brighter signs, installing neon lights in juniors sections and offering shopping carts to attract more shoppers.