May Department Stores’ Profit Falls

May Department Stores Co.’s fiscal fourth-quarter earnings slid 20% on weaker sales at stores open at least a year, the retailer said Thursday as it continued searching for a new chief amid lingering reports it might be bought out by a rival.

Falling short of Wall Street’s expectations, St. Louis-based May, operator of Robinsons-May, said it earned $339 million, or $1.10 a share, for the three-month period ended Jan. 29. That compared with earnings of $425 million, or $1.38, a year earlier.

Overall sales rose 12% to $5.04 billion -- helped by last year’s buyout of more than five dozen Marshall Field’s stores -- from $4.49 billion a year earlier. But sales at stores open at least a year, considered a good indicator of retail health, fell 5.2%.

Excluding store-divestiture costs of $25 million, May said it earned $1.15 a share. May said its fourth-quarter showing also included a change in lease accounting.

Analysts surveyed by Thomson First Call were expecting $1.28 a share.

“While our 2004 results fell short of our expectations, we have implemented a number of strategic and tactical initiatives that are designed to increase our sales and earnings in the present year,” said John Dunham, May’s president and acting chairman and chief executive.

May shares fell 73 cents, or 2.3%, to $30.78 on the New York Stock Exchange.

The company’s earnings release -- the first since last month’s abrupt departure of Chairman and CEO Gene Kahn -- made no mention of lingering speculation of a possible buyout by rival Federated Department Stores Inc.

In a conference call with analysts, May executives also offered no detailed update on the search for a successor to Kahn, who resigned just seven months after helping May acquire Target Corp.’s Marshall Field’s department stores and nine Mervyn’s sites for $3.24 billion -- a price many analysts called too steep by hundreds of millions of dollars.

For the year, May earned $524 million, or $1.70 a share, on sales of $14.4 billion, compared with $434 million, or $1.41, on $13.3 billion in revenue in 2003. Excluding store-divestiture costs, 2004 earnings were $555 million, or $1.80 a share.