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FAY'S FIRST QUARTER EARNINGS INCREASE 13 PERCENT BEFORE ONE-TIME CHARGES

 LIVERPOOL, N.Y., May 25 /PRNewswire/ -- Fay's Incorporated (NYSE: FAY) reported that a one-time non-cash charge associated with the adoption of new accounting standards for post-retirement benefits and a charge against net earnings related to the April 1993 closing of nine Paper Cutter Stores located in the Philadelphia metropolitan area has resulted in a first quarter loss of $5.9 million or $.29 per share. Excluding these charges, Fay's net earnings for the first quarter were $1,736,000 or $.09 per share. This compares to net earnings in the first quarter of last year of $1,537,000 or $.08 per share.
 Revenues for the first quarter increased 2.2 percent to $216.7 million from $212.2 million a year earlier. Comparable store sales during the quarter (sales from stores open one year or more as of May 1, 1993) increased 3.0 percent.t? the end of the first quarter Fay's was operating 304 stores, compared to 314 stores at the end of the first quarter of fiscal 1993.
 The charge to first quarter net earnings related to the adoption of Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Post-Retirement Benefits Other Than Pensions," amounted to $4.8 million or $.24 per share. Also included in the first quarter operating results were charges for future rental obligations, abandoned leasehold improvements and other expenses related to the closing of the Philadelphia Paper Cutter Stores amounting to $2.8 million or $.14 per share.
 Henry A. Panasci, Jr., Fay's chairman, stated, "First quarter results from our ongoing operations were quite gratifying, especially in light of the continued weakness in the economy and the adverse weather conditions encountered during the quarter. Efforts aimed at improving sales, controlling costs and maintaining gross margins all contributed to our positive first quarter performance. With the expenses associated with the closing of the Philadelphia Paper Cutter Stores behind us, we look forward to improved earnings for the remainder of the year."
 During the first quarter, the company acquired five drug stores and opened one Wheels Discount Auto Supply Store. At the end of the first quarter, Fay's was operating 248 drug stores in New York, Pennsylvania, New Hampshire and Vermont, together with 31 Wheels Discount Auto Supply Stores and 25 Paper Cutter Stores in the state of New York.
 FAY'S INCORPORATED
 (Unaudited)
 Thirteen Weeks Thirteen Weeks
 Ended Ended
 May 1, 1993 April 25, 1992
 Revenues $216,742,000 $212,156,000
 Earnings (Loss) Before Taxes (1,876,000) 2,597,000
 Earnings (Loss) Before
 Cumulative Effect of
 Accounting Change (1,097,000) 1,537,000
 Cumulative Effect of
 Accounting Change (4,806,000) ---
 Net Earnings (Loss) (5,903,000) 1,537,000
 Earnings Per Share:
 Earnings (Loss) Before
 Cumulative Effect of
 Accounting Change $(.05) $.08(A)
 Cumulative Effect of
 Accounting Change (.24) --
 Net Earnings (Loss) $(.29) $.08(A)
 Average Shares Outstanding 19,978,861 19,895,401(A)
 Stores in Operation at
 End of Period 304 314
 (A) -- Adjusted to reflect 5-for-4 stock split distributed June 19, 1992.
 -0- 5/25/93
 /CONTACT: Henry A. Panasci, Jr., chairman of the board of Fay's Incorporated, 315-451-8000/
 (FAY)


CO: Fay's Incorporated ST: New York IN: REA SU: ERN

BM -- CL005 -- 2075 05/25/93 10:08 EDT
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Publication:PR Newswire
Date:May 25, 1993
Words:543
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