Update: May Beats Estimates by 3 Cents

Updated from 9:44 a.m. ET

May Department Stores

(MAY)

, which operates

Lord & Taylor

and

Filenes

among other chains, reported that its third-quarter earnings fell 28% as the company slashed prices to clear spring and summer items from its inventory.

Still, the company beat Wall Street consensus estimates by 3 cents.

May, based in St. Louis, reported third-quarter profits of 27 cents a share on net earnings of $85 million. This compares with $138 million in net earnings, or 38 cents a share, in the same quarter a year ago.

"As previously announced, May moved aggressively this quarter to clear excess spring and summer apparel," the company said in a statement. "The clearance of that inventory is complete and the company is well positioned for the fourth quarter."

Wall Street analysts expected the company to earn 24 cents a share in the third quarter, according to market research firm

First Call/Thomson Financial

.

Third-quarter sales were $3.33 billion, a 5% increase from $3.17 billion in sales in last year's third quarter. Sales in comparable stores -- those shops open at least a year -- declined 0.1% for the quarter.

Through the first nine months of the year, May opened 21 of 23 planned stores for the year.

May finished Monday regular trading up 63 cents, or 1% at $46.56.