SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C. 20549

                           FORM 10-Q

        QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

           For the quarterly period ended May 2, 1998

        TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d)
              OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from  ________  to  _________

                 Commission File Number 1-3339

                MERCANTILE STORES COMPANY, INC.
    (Exact name of registrant as specified in its charter)

       Delaware                                        51-0032941
(State or other jurisdiction of incorporation)   (I.R.S. Employer
                                                       Identification No.)

    9450 Seward Road Fairfield, Ohio                        45014
(Address of principal executive offices)                 (Zip Code)

 Registrant's telephone number, including area code:         (513) 881-8000

     Indicate by check mark whether the registrant  (1) has  filed all 
reports required to be filed by section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such shorter 
period that the registrant was required to file such reports), and 
(2) has been subject to such filing requirements for the past 90 days.

                                       Yes    X             No 

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the latest practicable date.

    36,748,550 shares of Common Stock at $.14 2/3 par value
                     as of June 16, 1998

Total number of sequentially numbered pages in this filing, including
                   exhibits thereto: 12


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                          MERCANTILE STORES COMPANY, INC.    
                              AND SUBSIDIARY COMPANIES      
                                        
                                FORM 10-Q           
                                       
                                     INDEX                    
                                        
                                        
PART I - FINANCIAL INFORMATION                    
                                        
             Item 1 - Financial Statements:
                                        
                  Consolidated Condensed Balance Sheets -
                      May 2, 1998 and January 31, 1998                     3
                                        
                  Consolidated Condensed Statements of
                      Income - For the thirteen weeks     
                      ended May 2, 1998 and May 3, 1997                    4
                                        
                 Consolidated Condensed Statements of
                       Cash Flows - For the thirteen weeks         
                       ended May 2, 1998 and May 3, 1997                   5

                                       
                  Notes to Consolidated Condensed Financial
                       Statements                                      6 - 9
                                                      
                                       
             Item 2 - Management's Discussion and Analysis of
                        Results of Operations and Financial
                        Condition                                    10 - 11
                                       
                                        
PART II - OTHER INFORMATION                                      
                                        
             Item 4 - Submission of Matters to a Vote of       
                         Security Holders                                 12
                                        
                                        
             Item 6 - Exhibits and Reports on Form 8-K                    12


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         MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
                 CONSOLIDATED CONDENSED BALANCE SHEETS   
                          (in thousands)           

                                               May 2,       January 31,
                                                 1998          1998
                                                       
Assets
Current Assets:
  Cash and cash equivalents               $   153,928      $   144,986
  Receivables:
     Customer, net                            525,230          571,513
     Other                                     13,236           17,591
  Inventories                                 592,337          505,201
  Other current assets                         37,308           35,898
                                            ---------        ---------     
     Total Current Assets                   1,322,039        1,275,189

Prepaid Pension &
   Other Noncurrent Assets                    121,589          116,218

Property and Equipment, net                   770,393          786,384
                                            ---------        ---------
  Total Assets                            $ 2,214,021      $ 2,177,791


Liabilities and Stockholders' Equity
Current Liabilities:
  Accounts payable                        $   139,252      $   79,117
  Notes payable and current maturities
     of long-term debt                         21,430          21,429
  Accrued income taxes                         26,360          40,913
  Taxes other than income                      25,820          22,235
  Accrued payroll                              18,220          24,410
  Other current liabilities                    63,351          63,775
                                            ---------       ---------
  Total Current Liabilities                   294,433         251,879

Long-term Debt                                202,077         202,637

Other Long-term Liabilities                    76,486          76,429

Stockholders' Equity                        1,641,025       1,646,846
                                            ---------       ---------
 Total Liabilities &
    Stockholders' Equity                  $ 2,214,021     $ 2,177,791

The accompanying notes are an integral part of these statements.

                                
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<PAGE>                                
                                
      MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
            CONSOLIDATED CONDENSED STATEMENTS OF INCOME
               (in thousands, except per share data) 
                                
                                               Thirteen Weeks Ended
                                                May 2,         May 3,
                                                 1998           1997
                                                          

Revenues                                     $ 688,286     $  683,298           
                                                                         

Cost of goods sold (including occupancy
 and central buying expenses)                  486,336        478,928

                                                                         
 Gross Profit                                  201,950        204,370


Expenses and Other Income:

  Selling, general and
        administrative expenses                174,735        172,642

  Interest expense, net                          2,296          3,235

  Other income                                  (2,455)        (3,252)
                                               --------       --------
                                                174,576       172,625

Income before Provision for Income Taxes         27,374        31,745

Provision for income taxes                       10,595        12,437
                                                -------       -------
Net Income                                   $   16,779      $ 19,308 
                                                                         
Earnings Per Share                           $      .46      $    .52 

Dividends Declared Per Share                 $     .615      $   .585 

Weighted Average Shares Outstanding          36,748,550    36,835,783


   The accompanying notes are an integral part of these statements.
                                   
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          MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
               CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                             (in thousands)           

                                           Thirteen Weeks Ended
                                              May 2,           May 3,
                                              1998             1997
                                                
Cash Flows From Operating Activities:
Net Income                                 $ 16,779         $ 19,308 

Adjustments to reconcile net income to net
cash provided by operating activities:
   Depreciation and amortization             20,798           18,727
   Deferred income taxes                        249            1,813 
   Net pension benefit                       (5,562)          (3,933)
   Change in inventories                    (87,136)         (19,028)
   Change in accounts receivable             50,638           45,782 
   Change in accounts payable                60,135           24,731 
   Net change in other working
         capital items                      (34,486)         (31,200)
                                            --------         --------
Net cash provided by operating activities    21,415           56,200 


Cash Flows From Investing Activities:
   Cash payments for property
             and equipment                  (25,392)         (26,850)
   Proceeds from sale of property            24,314                -
   Net change in other noncurrent
            assets and liabilities              188             (280)
                                            --------         --------
Net cash used in investing activities          (890)         (27,130)

Cash Flows From Financing Activities:
   Payments of notes payable and
            long-term debt                     (559)          (3,529)
   Repurchase of common stock                     -           (3,487)
   Dividends paid                           (11,024)         (10,500)
                                            --------         --------
Net cash used in financing activities       (11,583)         (17,516)

Net increase in cash and cash equivalents     8,942           11,554 
Beginning cash and cash equivalents         144,986          128,115
                                            -------          -------
Ending cash and cash equivalents         $  153,928        $ 139,669 


Supplemental Cash Flow Information:
   Interest paid                          $   7,718        $   8,505 
   Income taxes paid                      $  24,899        $  18,830 


   The accompanying notes are an integral part of these statements.
                                   
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    MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
                NOTES TO CONSOLIDATED CONDENSED
                      FINANCIAL STATEMENTS

1. Nature of Operations
   Mercantile Stores Company, Inc. (the "Company") is a conventional department
   store retailer engaged in the general merchandising business. The Company
   operates 103 department stores and 16 home fashion stores under 13 different
   names in a total of 17 states.  A subsidiary, Mercantile Credit Corp.,
   provides servicing for the Company's private label credit program. The
   Company also maintains a partnership interest in five operating shopping
   center ventures and one land ownership venture. During the second quarter
   of 1998, the partnership interest in one of the shopping center ventures
   was sold.  The pre-tax profit of approximately $4 million resulting from
   this sale will be recorded in the second quarter.

2. Accounting Policies
   The consolidated condensed financial statements included herein have been
   prepared by the Company, without audit, pursuant to the rules and
   regulations of the Securities and Exchange Commission with respect to
   Form 10-Q.  Certain information and footnote disclosures normally included
   in financial statements prepared in accordance with generally accepted
   accounting principles have been condensed or omitted pursuant to such rules
   and regulations, although the Company believes that the disclosures made
   herein are adequate to make the information not misleading. It is suggested
   that these consolidated condensed financial statements be read in conjunction
   with the financial statements and the notes thereto included in the
   Company's latest annual report on Form 10-K.

   Interim statements are subject to possible adjustments in connection with
   the annual audit of the Company's accounts for the full 1998 fiscal year.
   In the Company's opinion, all adjustments (consisting only of normal
   recurring adjustments) necessary for fair statement presentation have been
   included.

   Because of seasonality, the results of operations for the periods presented
   are not necessarily indicative of the results expected for the year ending
   January 30, 1999.

3. Revenues
   Revenues include sales from retail operations, leased departments and 
   finance charge revenue earned on customer accounts serviced by the Company
   under its private label credit program. Finance charge revenue is recognized
   in the period in which it is earned and amounted to $24 million and $22
    million, respectively, for the 1998 and 1997 first quarter.

                          (Continued)
                                
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    MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
                NOTES TO CONSOLIDATED CONDENSED
                      FINANCIAL STATEMENTS
                                
                          (Continued)

4. Cash and Cash Equivalents
   Cash and cash equivalents represent cash and short-term, highly liquid
   investments with a maturity of ninety days or less.

5. Customer Receivables
   Customers are extended credit under customary revolving credit terms.
   Customer receivables are classified as current assets and, consistent
   with industry practice, include some amounts which are due after one year.
   Concentrations of credit risk with respect to customer receivables are
   limited due to the large number of customers comprising the Company's
   credit card base, and their geographic dispersion.  Customer receivables
   at May 2, 1998 and January 31, 1998 are net of an allowance for doubtful
   accounts of $20 million and $18 million, respectively.

6. Merchandise Inventories
   All retail inventories are valued by the retail method and stated on the
   last-in, first-out (LIFO) cost basis, which is lower than market.  Since
   inventories under the LIFO method are based on an annual determination of
   quantities and costs, the inventories at interim periods are based on
   certain estimates relating to quantities and costs as of the fiscal
   year-end.

7. Stockholders' Equity
   During the first quarter of 1997, the Board of Directors authorized the
   Company to purchase up to 1,500,000 shares of its common stock in the open
   market over a time frame which may extend to ten years.  These shares are
   to be held as Treasury stock and are to be used solely to satisfy 
   requirements arising from the exercise of options granted under the 1996
   Stock Option Plan. There were no shares purchased under this program during
   the first quarter of 1998. During the quarter ended May 3, 1997, the Company
   purchased 73,300 shares of its common stock at a cost of approximately
   $3.5 million.




                          (Continued)
                                
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    MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
                NOTES TO CONSOLIDATED CONDENSED
                      FINANCIAL STATEMENTS
                                
                          (Continued)


8. 1996 Stock Option Plan
   The Mercantile Stores Company, Inc. 1996 Stock Option Plan (the Plan)
   provides for the issuance of stock option awards to certain employees
   designated by the Company's Board of Directors. Stock options awarded under
   the Plan are granted at an exercise price equal to the fair market value of
   the Company's common stock on the date of grant and generally vest and
   become exercisable in equal increments over a four-year period. The Plan
   also provides for full accelerated vesting in the event of a change in
   control of the Company, as defined.  The maximum number of shares available
   for awards under the Plan is 1,500,000.  During the quarter ended
   May 3, 1997, 95,500 stock options were granted under the Plan at an exercise
   price of $48 per share.  No additional options have been granted. During
   the first quarter of 1998, 25% of the options granted in 1997 became
   exercisable. None were exercised. 

9. Earnings per Share (EPS)
   Effective January 31, 1998, the Company adopted Statement of Financial
   Accounting Standards No. 128, "Earnings per Share," which replaces the
   calculation of primary and fully diluted EPS  which existed under previous
   accounting standards with new standards for the calculation of basic and
   diluted EPS.  The assumed issuance of all equivalent common shares granted
   under the  Company's 1996 Stock Option Plan did not have a material effect
   on the number of weighted average shares outstanding used in the calculation
   of EPS for the periods presented. The Company's basic and diluted EPS
   amounts are identical for the periods presented. 

10.  Subsequent Event Acquisition by Dillard's, Inc.
   On May 16, 1998, the Company entered into an Agreement and Plan of Merger
   with Dillard's, Inc. and MSC Acquisitions, Inc., a wholly owned subsidiary
   of Dillard's, Inc., pursuant to which MSC Acquisitions, Inc. agreed to
   purchase all of the issued and outstanding shares of the Company through a
   cash tender offer of $80 per share, or approximately $2.9 billion.
   Stockholders representing approximately 40% of the issued and outstanding
   shares of the Company have contractually agreed, among other things, to
   tender their shares.  The cash tender offer was commenced on May 21, 1998
   and is scheduled to expire on June 19, 1998, unless the offer is extended.
   The consummation of the merger is contingent upon, among other things, the
   tendering of more than 50% of the outstanding shares of the Company and the
   approval of the Federal Trade Commission.


                          (Continued)
                                
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    MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
                NOTES TO CONSOLIDATED CONDENSED
                      FINANCIAL STATEMENTS
                                
                          (Continued)

10.  Subsequent Event Acquisition by Dillard's, Inc. (continued)
   In the first quarter of 1998, the Company's Board of Directors approved an
   Incentive Performance Plan to, among other things,  award a total of up
   to $3 million to five key executives for assistance to the Board in pursuing
   one or more strategic alternatives potentially available to the Company.
   If and when the merger with Dillard's is consummated, it would be the
   expectation that the Board would elect to pay the full amount authorized
   under the Incentive Performance Plan to the five key executives. In
   addition, under the Incentive Performance Plan, the Company must pay a
   "Gross-Up Payment" (as defined therein) to any covered associate with
   respect to any payment to be made under the Incentive Performance Plan,
   under Severance Protection Agreements, or in respect of the Company's 1996
   Stock Option Plan.

                                
                                
                                
                                
                                
                                
                                
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       MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                        AND FINANCIAL CONDITION
                                
Material Changes in the Results of Operations for the First Quarter of 1998
             Compared to the First Quarter of 1997

Revenues increased by .7% to $688 million in the 1998 first quarter. Sales
from retail operations were $664 million, a  .5% increase over the prior
year; comparable unit sales decreased by 1.1%. Finance charge revenue
totaled $24 million in the current year quarter, a $2 million increase over
that recorded in the prior year.

Cost of Goods Sold (COGS), as a percent to revenues, was 70.7% in 1998
compared to 70.1% in the prior year.  The increase was attributable to a
 .3% increase in the occupancy costs (primarily depreciation) element of
COGS, which reflects the decline in comparable store sales and the
under-performing total sales results, and a .3% increase in costs associated 
with lower-margin leased department sales (leased department sales increased
11% in the period).  Merchandise margins in the period were relatively equal
with those reflected in the 1997 quarter.

Selling, general and administrative expenses, as a percent to revenues,
were 25.4% in the 1998 quarter, an increase of .1% over the prior year.
This increase was reflected in payroll and payroll related expenses and was,
again, primarily related to the inability to leverage the under-performing
sales results.

Interest expense, net, decreased $.9 million in the 1998 first quarter. The
decline was primarily attributable to a reduction in interest expense
associated with structured debt.  Long-term debt (including the current
portion) was reduced by approximately $27 million from the end of 1997's first
quarter to the same date in 1998.  In addition, increased interest income
earned on a higher level of invested cash during the current year's first
quarter contributed to the decline in net interest expense.

                                
                                
                                
                          (Continued)
                                
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<PAGE>

       MERCANTILE STORES COMPANY, INC. AND SUBSIDIARY COMPANIES
     MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                        AND FINANCIAL CONDITION
                                
                            (Continued)

Material Changes in Financial Condition From January 31, 1998 to May 2, 1998
The retail business is highly seasonal with approximately one-third of annual
sales being generated in the fourth quarter which encompasses the important
Christmas selling season.  As a result, significant variations can occur when
comparing financial conditions at the above dates.

The $9 million increase in cash and cash equivalents during the period was
attributable to the $21 million of cash generated by operations and proceeds
which was from the sale of property of $24 million, substantially offset by
$25 million of payments for capital expenditures and $11 million of dividend
payments.

Net customer receivables decreased approximately $46 million due to the normal
pay-down of peak year-end balances.

Inventories increased $87 million during the period due to the normal
replenishment of inventory levels following the Christmas promotional and
January clearance periods, the under-performing sales results and the $10
million inventory requirement for the two new stores opened during the period.
 
In April 1998, the Company completed the sale of its McAlpins' store in the 
Dayton, Ohio market for $24 million in cash proceeds. The sale of the store
did not have a material impact on the Company's results of operation. 

The $60 million increase in accounts payable is related to the increase in
inventory.

The Company satisfies short-term financing needs primarily through internally
generated funds. In addition, the Company has in place a committed, unsecured
$200 million revolving credit facility. This arrangement is with a consortium
of seven banks and expires in August, 2000.  When used, interest rates will
be based, at the Company's option, on either the banks' best rates under a
competitive bid environment or a predefined spread over the appropriate LIBOR
rate.  In addition to this committed facility, the Company has available
uncommitted lines of credit totaling $120 million. Significant cash balances
were maintained throughout the first three months of 1998 and it was not
necessary to use any of these credit arrangements during the period.

On May 16, 1998, the Company entered into an agreement with Dillard's Inc.,
pursuant to which all of the outstanding shares of the Company would be
acquired for $80 per share. Additional information regarding this subsequent
event is explained in footnote 10 of the Notes to Consolidated Condensed
Financial Statements.





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<PAGE>

                  PART II  - OTHER INFORMATION


Item 4 - Submission of Matters to a Vote of Security Holders

   (a) There were no matters submitted to a vote of security holders
       during the quarterly period ended May 2, 1998.





Item 6 - Exhibits and reports on form 8-K

   (a) Exhibit 27 - Financial Data Schedule    (filed electronically).

   (b) There were no reports on Form 8-K filed for the quarterly
       period ended May 2, 1998.



                           SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                         MERCANTILE STORES COMPANY, INC.
                                  (Registrant)


June 16, 1998
  (Date)

                                   s/ James M. McVicker
                              ----------------------------------------
                              (James M. McVicker, Senior Vice President,
                                   and Chief Financial Officer)




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