|
 |
Apr-13-2008Wal-Mart, Costco Sales Gain as Bargains Lure Shoppers (Update8)(topic overview)
CONTENTS:
- "We are seeing a significant slowdown here in consumer spending. (More...)
- The downbeat results were far from unexpected. (More...)
- NEW YORK -- Shares of broadline retailers closed up on Thursday as Wal-Mart Stores raised its first-quarter profit outlook. (More...)
- Apparel retailers suffered one of the worst declined in years, and for the most of the retailers in the sector sixth monthly sales decline in a row. (More...)
- Sam's Club was down so little, you can blame all of it on Easter. (More...)
- Sales fell noticeably at Target, J.C. Penney, and specialty apparel chains. (More...)
- The average U.S. price of gasoline was $3.33 in the week ended April 7, up 19 percent from a year earlier. (More...)
- In tough times, food drives traffic better than clothing, furniture and jewelry. (More...)
- Cash-strapped shoppers shunned apparel and other discretionary purchases in March, stocking up instead on groceries and other basics at discounters like Wal-Mart as the economy swooned. (More...)
- Crude oil fell more than USD 1 a barrel in New York on signs that high prices and a slowing economy will curb U.S. fuel consumption. (More...)
- "We have been conservative in our inventory planning and expense management and will continue to do so until the environment improves," Montgomery said. (More...)
- In the UK, Asda's sales were ahead of plan, driven by high traffic and the Easter seaon, with the strongest performances in confectionery, fresh foods, children's wear and video games. (More...)
- Nordstrom had a 9.1 percent decline in same-store sales; analysts had expected an 8.0 percent drop. (More...)
- Beyond still-climbing gasoline and diesel prices not helping get folks in a shopping mood, the Easter holiday also resulted in store closures, further skewing comparisons. (More...)
- The company operates 1,050 women's specialty stores, including 608 Chico's front-line stores, 38 Chico's outlet stores, 314 White House/Black Market front-line stores, 19 White House/Black Market outlet stores, 70 Soma Intimates front-line stores and 1 Soma Intimates outlet store. (More...)
- Schoewe didn't detail specific product categories that are growth leaders. (More...)
SOURCES
FIND OUT MORE ON THIS SUBJECT
"We are seeing a significant slowdown here in consumer spending. It really seems to have picked up steam in the last couple of months." A bright spot amid the dreary results were warehouse club operators Costco Wholesale Corp and BJ's Wholesale Club Inc. Their March sales were stronger than expected as shoppers headed to warehouse locations to fill their tanks at the club's less-expensive gas stations. While Wal-Mart's 0.7 per cent rise in March sales at U.S. stores open at least a year was below Wall Street expectations of a gain of 0.9 per cent, the world's largest retailer raised its first-quarter earnings forecast, citing expense controls and fewer markdowns. Its shares rose 1 per cent to $US54.70 in early New York Stock Exchange trade on Thursday. [1] April 10 (Bloomberg) -- Wal-Mart Stores Inc. and Costco Wholesale Corp. said March sales rose as consumers buffeted by job losses and declining home values sought discounts on food and electronics. Wal-Mart, the world's biggest retailer, said sales at stores open at least a year increased 0.7 percent, within its forecast, helped by grocery and flat-panel TV sales. The Bentonville, Arkansas-based company raised its first-quarter profit projection.[2] Investors were cheered by a Labor Department report that jobless claims fell more than forecast last week, after a surge the prior week. Discount retailers like Wal-Mart Stores Inc. and Costco Wholesale Corp. said sales rose in March, and they expect bargain-hunting consumers will continue to drive sales up.[3]
Retailer reported net sales of $6.57 billion in March during the five weeks ended April 6, 2008, an increase of 11% from $5.93 billion in the same five-week period last year. For the first thirty-one weeks of its reporting period ended April 6, 2008, Costco net sales were $41.34 billion, an increase of 12% from $36.96 billion during the similar thirty-one-week period last year. Wal-Mart Stores, Inc same store sales rose 0.7%, excluding fuel same and lifted its first quarter forecast between 74 cents and 76 cents from 70 cents to 74 cents.[4]
As talk of a recession has intensified, it might not be surprising that the price of Wal-Mart Stores Inc. WMT has been moving steadily higher. Its reputation as a low-price leader as well as its increasing exposure to consumer staples (such as food) would be expected to help it maintain sales in an economic downturn. Thursday's announcement that Wal-Mart's same-store sales in March rose while other major retailers suffered severe declines lifted its stock by more than 2%, continuing a steady ascent that began in September. Its share price has climbed from the low 40s last autumn to its current level in the mid-50s. Helping to lift its share price was a revision by Wal-Mart of its first-quarter earnings per share to the 74-to-76-cent range from its previous level of 70 cents to 74 cents.[5] Wal-Mart Stores sales rose 5% to $23.21 billion with same-store sales up 0.9% while Sam's Club warehouse club outlets grew sales 3.2% to $4.29 billion on a 0.7% dip in same-store sales. For April, the company expects April same-store sales to be up 1% to 3% and it raised its fiscal first quarter earnings target to 74 cents to 76 cents a share from a previous 70 cents to 74 cents. Things were not so hot at rival Target (TGT) as its March same-store sales fell 4.4%, hurt by lower men's apparel and lawn and garden sales.[6]
Retailer back in favour on Wall Street after same store sales rise in March. Wal-Mart saw its shares reach their highest level since November 2004 on Wall Street yesterday, after it revealed its same store sales rose in March. The retail giant also increased its estimate for its first quarter earnings to a range of 74 to 76 cents a share, from a previous range of 70 to 74 cents. Wal-Mart said that same store sales rose by 1.1 per cent in March - not a dramatic increase, but still much better than its peers (Target slid 4.4 per cent last month, while JC Penney dropped by 12.3 per cent).[7]
Retailers in the U.S. are reporting the weakest March sales in 13 years. The effects of consumers limiting their spending kept revenues down at Bentonville-based Wal-Mart, but the company increased its earnings forecast slightly based on its own cost controls. March proved to be another weak month for many other retailers, including Little Rock-based Dillard's Inc., J.C. Penney Co., Gap Inc., and Limited Brands Inc. All of them reported sharp drops in sales.[8] Wal-Mart Stores Inc. and Costco Wholesale Corp. were among the best performers. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise. March proved to be another weak month for many others, including J.C. Penney Co., Gap Inc., and Limited Brands Inc. All of them reported sharp drops in sales. "Discounters are going to continue to do well in this economy," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Anything that is discretionary is going to continue to be under pressure." According to a preliminary tally by UBS-International Council of Shopping Centers, sales slid 0.5 percent versus its original estimate of 1 percent growth.[9] As retailers reported sales results on Thursday, Wal-Mart Stores Inc. and Costco Wholesale Corp. were among the few winners, as shoppers stuck to basics. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise. It also said that April sales should top prior expectations. March proved to be bleak for most others, including J.C. Penney Co., Gap Inc., and Limited Brands Inc. All of them reported sharp drops in sales.[10]
Even with the improvement, the four-week average for claims rose by 2,500 to 378,250, the highest level since October 2005. While many retailers -- from Gap to Saks -- said Thursday that March sales slid, Wall Street was encouraged that other companies are weathering the economic weakness. Wal-Mart Stores Inc. and Costco Wholesale Corp., stores that sell staples such as food and gas, reported sharp increases and indicated they expect sales to keep rising.[11]
Some retailers -- particularly discounters that sell staples like food and gasoline -- are weathering the economic weakness. Wal-Mart Stores Inc. reported a strong rise in March sales at stores open for at least a year, and boosted its forecast for April sales and first-quarter profit.[12]
The sales drop was the worst March sales performance for retailers since the firm first started tracking monthly same-store sales numbers in 2000. Wal-Mart ( WMT, Fortune 500 ), the world's largest retailer, posted a 0.7% increase in March sales at its stores open at least a year, which is a key measure of retail performance known as same-store sales. That was at the low-end of its own guidance, which called for sales to be flat to up 2%. The company said that Easter coming about a month early this year resulted in a shorter selling period for the holiday. It also cited cooler weather in March for weak sales of spring and summer clothing. Wal-Mart offset some of the negative news by upping its first-quarter profit estimate and delivering a more optimistic sales guidance for April.[13] NEW YORK CITY-March same-store sales were down 0.5% since the same month in 2007, the lowest drop in comparables since April 2007, which saw a 1.9% dip in year over year sales, according to a monthly International Council of Shopping Centers survey. Most retailers blame the loss on a shift in Easter from April to March this year, as well as March having one less shopping day compared to 2007. Notwithstanding Easter, however, the dip this March was the worst for the month since 1995, which saw a 0.8% drop from the year before. According to the survey, just a few standards such as food, front-end drug stores and off-price retailers had strong numbers in March.[14] Last month's showing shouldn't be hard to beat. It was the weakest March in 13 years, said Michael Niemira, chief economist at the International Council of Shopping Centers. By his calculations, same-store sales fell 0.5% from last year. "It was a very tough market in March for the retail industry," Niemira said. The earliest Easter in decades likely cut same-store sales growth by 2.5 percentage points, he said. The seasonal impact was large, especially for department stores and specialty apparel chains, he said.[15] Collectively in March, retailers posted a 0.5 percent drop in same-store sales, according to an index of 37 major chains compiled by the International Council of Shopping Centers. That's the worst showing for March in 13 years, said Michael Niemira, the trade group's chief economist.[16] Retailers' same-store sales fell 0.5 percent last month, the biggest decline in almost a year and the worst March since 1995, the International Council of Shopping Centers said, based on a survey of 37 chains.[17]
Most major retailers reported Thursday their worst March sales in 13 years, hit by an early Easter, consumers' worries about high gasoline and food prices, and slow job and housing markets. Companies with Chicago roots have become more difficult to track because Macy's and Sears no longer report their monthly sales numbers. Bon-Ton, the parent company of Carson Pirie Scott & Co., said Thursday its same-store sales dropped 5.3 percent in the five weeks that ended April 5.[18] A couple walks with bags from Gap outside of a Gap store in San Francisco, Thursday, April 10, 2008. The nation's retailers reported the weakest March sales in 13 years on Thursday as consumers _ fretting about mounting economic problems and enduring a frigid Easter _ limited their shopping to food and other essentials. Rosemary Lyons fills her trunk after shopping at Wal-Mart in Clarence, N.Y., Thursday, April 10, 2008.[19]
"Looking forward to April, record high gasoline prices and consumers' worry about the economy will continue to curb discretionary spending power," Niemira predicted. He said an earlier than usual Easter holiday cut into the number of shopping days last month, but that "weakness" spanned clothing shops, department stores and even hit luxury retailers. JC Penney, one of America's leading retailers, which operates over 1,000 department stores said its comparable store sales tumbled 12.3 percent for the five weeks ended April 5. The national retailer said its sales declines were "broad-based" and affected most merchandise categories, but some companies maintained positive sales last month. Wal-Mart Stores said it had experienced some "softness" in sales of certain goods, but the retail giant saw its U.S. sales rise 0.7 percent in the five weeks ended April 4.[20] Shoppers stuck to the essentials. Grocery, discounters and wholesale clubs such as Wal-Mart Stores Inc., BJs Wholesale and Costco fared well. Department stores, specialty and apparel retailers such as Abercrombie & Fitch, Limited, JCPenney, Nordstrom and Kohl's reported a drastic decline in sales compared with last year. "The reality is that shoppers are stepping up their plans to cut back spending," said Frank Badillo, senior economist at TNS Retail Forward, a Columbus, Ohio, research group.[21] As retailers reported sales results Thursday, Wal-Mart Stores Inc. and Costco Wholesale Corp. were among the few winners, as shoppers stuck to the basics. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise. It also said April sales should top previous expectations.[22]
Same-store sales fell 0. 7 percent at Sam's Club, Wal-Mart's wholesale club division. Costco Wholesale Corp., a competitor in the members-only sector, reported overall same-store sales up 7 percent 5 percent domestically and 17 percent in its international markets. Patricia Edwards, a Seattlebased analyst with Wentworth, Hauser & Violich, said Wal-Mart resolved some of its merchandise missteps just in time to attract customers burdened with high gasoline and food prices. "Wal-Mart not only got their act together at exactly the right time, but the economy is giving them a huge tailwind," she said. She called Wal-Mart's triple-digit increase in flat-panel televisions "just phenomenal numbers.” In its international division, Wal-Mart reported double-digit increases in same-store sales in Brazil, China and Canada and said sales at its Asda stores in the United Kingdom were above plan.[23] Wal-Mart Stores reported a 0.7 percent gain in same-store sales. That was slightly below the 1.0 percent estimate by analysts surveyed by Thomson Financial. The nation's largest retailer said food and consumables, and electronics such as video games and digital cameras, sold well. Cold weather hurt apparel, except for basics such as T-shirts.[24] Wal-Mart was a bright spot. It reported a 0.7 percent gain in same-store sales, excluding sales results from fuel. That was slightly below the 1.0 percent estimate by analysts surveyed by Thomson Financial, however. Wal-Mart still raised its first-quarter earnings outlook because of better inventory controls that yielded fewer markdowns and reduced store theft.[25]
Michael P. Niemira, the group's chief economist and director of research, said record fuel prices "and consumers' worry about the economy will continue to curb discretionary spending power." One bright note was Wal-Mart Stores Inc. (WMT) - which boosted its fiscal first-quarter earnings forecast as it posted a 0.7% rise in U.S. same-store sales excluding fuel, the lower end of its forecast.[26] A monthly survey by the International Council of Shopping Centers (ICSC) showed Thursday that comparable U.S. chain store sales slumped 0.5 percent in March compared with the same month a year ago. The consumer pullback marked the weakest monthly sales reading in 13 years and economists said it showed Americans are cutting back their spending amid fears the economy could be falling into a recession.[20] Sales fell 0.5% to $65.6 billion at stores open a year or more, according to the International Council of Shopping Centers' tally of 37 national chains. It was the weakest March in 13 years.[27] March sales at stores open at least a year were down half a percentage point from the comparable period last year for about 40 chain retailers reporting results yesterday, according to the International Council of Shopping Centers. It was the biggest drop in March since 1995.[19] NEW YORK (AdAge.com) -- The nation's retailers today reported the weakest sales for the month of March since 1995, according to the International Council of Shopping Centers, which tracks 80 retailers and takes into account sales at stores open at least a year, as well as total sales.[28]
Separately in New York, discount retailer Target on Thursday said sales at stores open at least a year fell a bigger-than-expected 4.4 per cent in March.[1] The dreary weather gave cash-strapped shoppers an easy excuse to delay purchases of spring clothing, resulting in disappointing sales at apparel retailers. Abercrombie & Fitch said its sales at stores open at least a year fell a greater-than-expected 10 per cent in March, citing the earlier Easter. Gap's sales at stores open at least a year plunged 18 per cent in March, hurt by weak sales in its Old Navy women's clothes and lower promotions at its namesake brand.[1] The tally is based on same-store sales, or sales at stores open at least a year, which are considered a key indicator of a retailer's health. Analysts already had been bracing for a weak March because of the early Easter, but retailers struggled with a collapse of confidence among shoppers, who face mounting financial problems such as soaring food and gas prices, limited credit and slumping home prices.[24] With food and energy prices soaring, home prices falling, the jobs market deteriorating and a credit crisis threatening further damage to the stock market, clothing is increasingly out of fashion with middle-market consumers. J.C. Penney reported a 12 percent drop in its same-store sales, or sales at stores open at least a year, as the chain's CEO said he doesn't expect the shopping environment to improve anytime soon. Gap's same-store sales plunged 18 percent amid dwindling store traffic, although it kept its profit outlook intact, citing tightly controlled inventory.[16] Kohl's Corp.' s same-store sales were down 15. 5 percent, and J. C. Penney Co. Inc.' s were down 12. 3 percent. Same-store sales are a key measure of retail performance because they don't include results from stores that have opened or closed in the past year. Wal-Mart raised its firstquarter profit forecast to a range of 74 cents to 76 cents from its previous forecast of 70 cents to 74 cents. Tom Schoewe, Wal-Mart's executive vice president and chief financial officer, said in a statement that the company managed its inventory well, resulting in lower markdowns.[23] Analysts surveyed by Thomson Financial projected, on average, a same-store sales decrease of 11.7% for the month. Penney had earlier cut its March forecast to a same-store sales drop in the double-digits on a percentage basis, compared with its prior view of a low-single-digit decline. For April, Penney said it expects a mid- to high-single digit decrease in April same-store sales -- this after the company two weeks ago trimmed its fiscal first-quarter outlook, projecting earnings of about 50 cents a share, with same-store sales falling by the high-single digits on a percentage basis.[6] The group's 11% sales drop, according to Thomson, was the worst since the firm began collecting same-store-sales data in 2000. Beyond Kohl's, which cut its quarterly earnings forecast to 40 cents to 42 cents a share from 50 cents to 54 cents, J.C. Penney Co. (JCP) reported a 12% drop in March same-store sales. The firm set a dour tone two weeks ago by cutting its fiscal first-quarter outlook as it said sales through Easter were " well below expectations."[26]
Apparel retailers, long struggling as well amid a dearth of must-have new fashions, also posted lower sales that ended up worse than expectations, led by industry leader Gap. Limited Inc. (LTD), which has also seen sales weaken amid an admittedly wrong style shift at its Victoria's Secret chain, reported an 8% drop for March. TJX Cos. (TJX), parent of discount chains T.J. Maxx and Marshalls, posted flat same-store sales and said quarterly earnings are now projected to be "at or slightly below" the low end of its forecast of 40 cents to 41 cents a share.[26]
Group net sales for the five weeks ending 4 April rose 7.9% to $36.97bn. The company raised its first-quarter profit projection, and said profit will be 74-76 cents a share, compared to its previous forecast of 70 cents to 74 cents. Rival Target, however, saw its same-store sales fall 4.4%, worse than its expected low single-digit decline. Its strongest product categories were health care, household and personal items, while its weakest were men's apparel and jewelry.[29]
The shares were down 11.4% in 2005, down 1.3% in 2006 and up just 2.9% last year. Wal-Mart said its same-store sales rose 1.1% in March and were up 0.7% excluding its gasoline sales. Those numbers may not look like much, but they're far better than what many other retailers are reporting. Target said same-store sales slid 4.4% last month; J.C. Penney said its sales were off 12.3%.[30] A fund focusing on the retail industry containing Wal-Mart as a portfolio holding might not make as much sense as WSI as a recession play. The retail-industry fund would likely contain holdings such as Gap Inc. GPS, whose same-store sales tumbled 18% in March, and J.C. Penney JCP, off 12.3% for the month in same-store sales. The Wal-Mart-related ETF was launched at the end of November and has been generally priced at a slight premium over its net asset value per share. Its premium of 0.60% at the end of March represented more of a departure of price from NAV than most ETFs, but was significantly less than a typical closed-end fund.[5]
Retail chains including Wal-Mart Stores Inc, Kohl's Corp, Gap Inc, Target Corp, JC Penney Co Inc and Abercrombie & Fitch Co reported monthly sales figures on Thursday that missed already low Wall Street expectations. "Any discretionary-related type retailers really took it on the chin this month," said Ken Perkins, president of Retail Metrics Inc.[1] Total sales for the period decreased 4.9 percent to $274 million''from $288 million. But''discount retailers such as Wal-Mart Stores Inc. and retail drugstore chain Walgreen Co. saw a rise in March.[31]
Wal-Mart Stores Inc. reported March sales slightly below analysts' expectations Thursday but raised its profit forecast after a month that was generally bleak across the U. S. retail sector.[23]
Residents fought the plans for more than four years. At one point, Wal-Mart was pursuing about a dozen new-store sites in central Ohio, but those plans have been scaled back, said Columbus retail analyst Chris Boring. Wal-Mart has struggled for some time to meet its sales targets at new stores and its stock has suffered, Boring said. "Wal-Mart does well in a bad economy," he said. "It has more to do with their stockholders." Wal-Mart also might be trying to avoid cannibalizing its existing stores, said Patricia Edwards, a retail analyst in the Seattle office of San-Francisco-based investment manager Wentworth, Hauser and Violich, which owns 544,000 shares of Wal-Mart stores stock.[32] An early Easter hurt retailers' results in March, but the weakness in sales clearly reflects the troubled economy's squeeze on consumers. Wall Street figures Wal-Mart will earn about $3.40 a share this year, up from $3.13 last year.[30] The world's largest retailer cited expense controls and fewer markdowns for the increase. It said March same-store sales, or sales in stores open at least one year, rose 0.7 percent, just short of Wall Street expectations.[33] Same-store sales are sales of stores open for at least a year. Retail consultant Neil Stern commented that if the early Easter were to have an effect on sales, retailers wouldn't be able to judge that impact''entirely''until they see sales for April as well as March.[31]
The Bentonville, Ark. -based company said yesterday that March sales at stores open at least a year increased 0.7 percent, while clothing retailers Limited Brands Inc., Gap Inc. and American Eagle Outfitters Inc. posted sales declines that exceeded analysts' estimates.[17] Specialty retailers and department stores, including Gap Inc., Kohl's and JC Penney, were particularly hard hit, all reporting double-digit drops in sales at stores open at least a year. Those retailers selling consumables, including Wal-Mart and Costco, fared better. "It's definitely worse than we expected," said Erin Armendinger, managing director of the Jay H. Baker Retailing Initiative at the Wharton School.[28] The headline numbers: The year-over-year percentage change in sales at stores open at least a year. This is derived from an index based on sales at stores including big retailers (Target, Wal-Mart, the Federated Department Stores etc.), and smaller chains (Gap and Limited), discounters, drug stores and wholesale clubs.[34]
Bharti will compete with retailers including Reliance Industries, the Tata Group and Pantaloon Retail in a market where sales through chain stores may rise eightfold to $97 billion by 2012, according to a forecast by consultant Technopak Advisors. The equal venture with Wal-Mart, the world's biggest retailer, was on schedule to open its first wholesale store by the end of the year and open 15 stores by 2015, Mittal said.[35]
Wal-Mart's shares rose nearly 1 percent on the New York Stock Exchange, to close at $54.66. Warehouse clubs Costco Wholesale and BJ's Wholesale also had better sales figures as shoppers looked for discounts on basic items and flocked to the cheaper gas offered at such stores. Other chains were not as fortunate.[19] Costco Wholesale Corp. and BJ's Wholesale Club logged gains that beat expectations, 7% and 6%, respectively. Wal-Mart Stores Inc. said its 1.1% gain was buoyed by solid sales in a variety of areas, including food, flat-panel TVs, and laptop computers. The company boosted its first-quarter profit projection for continuing operations to 74 cents to 76 cents a share from 70 cents to 74 cents.[27]
Wall Street is back in love with Wal-Mart Stores in a big way. The retailer's shares so far today are up 75 cents to $54.89 -- and touched their highest since November 2004 -- after the company raised its estimate of first-quarter earnings to a range of 74 to 76 cents a share, from a previous range of 70 to 74 cents.[30]
Average U.S. temperatures of 45.6 degrees Fahrenheit (7.6 degrees Celsius) depressed demand for sandals and lawnmowers and made March much cooler than a year ago, when the average temperature was 50.1 degrees, Wayne, Pennsylvania-based weather consulting company Planalytics said April 8. ''Consumers are growing increasingly wary about their jobs, about the economy and are strictly spending on non- discretionary items,'' Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said in an interview on Bloomberg Radio. Wal-Mart Profit Wal-Mart said first-quarter profit will be 74 cents to 76 cents a share, higher than its previous forecast of 70 cents to 74 cents.[36] Retail sales in March were the weakest in a year as the flagging economy, rising fuel and food prices, an early Easter and dismal weather combined to reduce consumer spending.[37] Target reported that March same-store sales fell 4 percent. Stimulus checks from the federal government, expected to be mailed starting next month, should help consumer spending, Paulson said in his speech to the Council of Institutional Investors. He said, "there is no doubt we're having a tough quarter, that the economy has turned down sharply."[19] Many retailers Thursday reported double-digit declines in same-store sales in March from the year-earlier period. As consumers cut back on spending and looked for discounts on what they did purchase, the nation's largest retailer produced a 1% gain (or 0.7%, excluding fuel) in sales for March, and served up a shock: It is raising its first-quarter earnings estimate.[38]
Wal-Mart was one of few bright spots as many retailers reported weak March same-store sales, hurt by a soft retail environment, cold weather and an earlier Easter.[33] Many retailers reported flat or declining same-store sales for March, citing a difficult economy, cold weather and an earlier Easter as the culprits.[31] Retailers, who have had to deal with a weakening economy in recent months, posted lower same-store sales in March as the early Easter also put a ding in firms' cash registers.[26]
NEW YORK (AP) - Even with most department stores reporting dismal same-store sales results for March, shares traded mainly higher Thursday as investors looked ahead to what retailers predict will be a better April.[39] Sales at mid-priced department store chains tumbled 15.5% at Kohl's and 12.3% at J.C. Penney. Among the few bright spots, the "trading down" trend among budget-consciousness shoppers continued to benefit sales at wholesale clubs such as Costco ( COST, Fortune 500 ). Costco's overall same-store sales, including gasoline purchases jumped 7% in March while its competitor BJ's Wholesale club grew sales 6%, including gasoline purchases.[13] York, Pa. -based Bon-Ton Stores Inc., which owns Chicago-area department store Carson Pirie Scott, reported a 5.3 percent decrease in same-store sales for March compared with the year-earlier period.[31] The department store retailer had warned late last month that same-store sales would be down at least 10 percent amid a souring economy. Even high-end department stores such as Saks Inc. which operates Saks Fifth Avenue, and Nordstrom languished.[24] On the opposite end, luxury retailers showed signs of lost momentum. Same-store sales at Saks fell 2.9 percent, while they rose just 0.4 percent at Neiman Marcus. Though tourists lured by a weak dollar are continuing to fuel luxury sales in Manhattan, stores like Saks Fifth Avenue have been staging more shopping events and promotions to prop up their business, said Faith Hope Consolo, chairman of retail leasing and sales at Prudential Douglas Elliman.[16] Deerfield-based Walgreen reported a 4.4 percent increase in same-store sales compared with the year-earlier period, and Wal-Mart reported a 0.7 percent rise. "Customers continued to turn to Wal-Mart for price leadership throughout the store, and they continued to see a better shopping experience," said Eduardo Castro-Wright, Wal-Mart Stores U.S. president and chief executive officer, in a press release. Wal-Mart attributed its''gain to continued strength in its three largest business units: grocery, health and wellness and entertainment, according to a press release.[31] Wal-Mart said March same-store sales rose 0.7%, helped by grocery and flat-panel TV sales. Same-store sales were up 0.9% at its U.S. Wal-Mart stores, but fell 0.7% at Sam's Club.[29]
The bright spot last month was Wal-Mart. It posted growth of nearly 1 percent in same-store sales, which measures sales at stores open at least a year, excluding fuel sales, and raised its first-quarter earnings expectations.[19] Analysts polled by Thomson Financial expected a 2.7 percent drop. Rival Wal-Mart posted a slight same-store sale gain. The company said the timing of this year's Easter holiday affected sales, though CEO Bob Ulrich said that performance was modestly below its planned range.[40] The Minneapolis-based discount chain saw same-store sales sag 4.4 percent in March compared with last year, while Wal-Mart's inched up 0.7 percent.[41] Nordstrom, meanwhile, reported a 9.1% drop in March same-store sales, as opposed to a 15% increase last year. Wal-Mart reported during its monthly sales call that grocery was a solid performer, with paper and consumables, as well as dry grocery goods.[28]
JC Penney also had a tough month, as same-store sales dropped 12.3%, compared with an 11% rise in March of last year. The retailer did note in its monthly sales call that consumers are responding positively to its much-advertised American Living launch.[28]
The results, based on same-store sales or sales at stores opened at least a year, were the weakest since March 1995, when the industry registered a decline of 0.8 percent.[9] "The numbers will look better next month, but we wouldn't read too much in that either," Mr Perkins said. "If you take these numbers together, we would expect continued softness in May and June." Meanwhile in Chicago JC Penney said on Thursday its March sales at department stores open at least a year fell 12.3 per cent, and it forecast a decline for April.[1] March sales at stores open at least a year fell 0.4% vs. a year ago, short of already-lowered views of a 0.3% gain, said Ken Perkins, president of Retail Metrics.[15]
Supermarket start New Delhi-based Bharti planned to have 10 million sq ft of retail space and employ 60,000 people by 2015, Mittal said in February last year when it announced the retail plan. Bharti had then set a target to open its first store by March. Bharti expects the retail unit's sales at Rs 20,000 crore ($5 billion) by 2015, Mittal said. It will set up supermarkets, hypermarkets and convenience stores and sell products including food, electronics, clothing and furniture.[35] Wall Street is accentuating the positive today -- a safe enough course given some mixed economic news. Sales at chain stores were down 0.5 percent during March from a year ago; Moody's Economy.com reports this was the worst March for chain stores since 1995. This is in line with gloomy consumer sentiment.[34] CHICAGO (Dow Jones) -- Discount store sales held up fairly well in March even as the economic slowdown began to bite into retailers who rely more on consumers' willingness to make discretionary purchases -- and most chains still missed Wall Street's expectations.[6]
NEW YORK (CNNMoney.com) -- Retailers blamed an early Easter and cooler weather for eroding store sales in March. Analysts said those two factors, combined with ongoing sluggishness in consumer spending, further exacerbated the damage.[13] NEW YORK -- An early Easter holiday, chilly weather and recession-wary consumers combined to deliver dismal March sales results for U.S. retailers.[1] NEW YORK (AP) - Retailers have posted the weakest March sales in 13 years. Consumers appear to have been limiting their purchases to the essentials, in the face of the housing crunch, credit crisis and volatility in the financial markets.[42] Chico's wasn't alone. National retailers reported the weakest March sales in 13 years on Thursday as consumers - fretting about mounting economic problems and enduring a frigid Easter - limited their shopping to food and other essentials.[9] NEW YORK - Most retailers reported sluggish sales in March while consumers, fretting about mounting economic problems, tended to limit their shopping to food and other essentials.[24]
NEW YORK (AP) - Teen retailers mainly rose on Thursday, even as many reported weak March same-store sales, but predicted better results in April.[39] NEW YORK (AP) - Big-format discount retailers rose on Thursday as their March same-store sales reports were among the best in a weak retail sector.[39]
Costco, meanwhile, continued to be one of the few bright spots in the retail landscape, as it reported a 5% climb in March same-store sales at U.S. outlets, on top of a 5% gain a year ago.[28] Limited Brands posted an 8 percent same-store sales drop, greater than the 7.7 percent decline analysts expected, according to Retail Metrics. Sales at its Victoria's Secret division fell 6 percent. Gap, the largest U.S. apparel chain, said sales plunged 18 percent, led by a 27 percent decline at its Old Navy chain.[2] Despite the lackluster results, retail shares posted a broad rally, as many investors had braced for steeper declines and more numerous profit warnings. Kohl's, which reported a whopping 16 percent same-store sales drop, saw its shares rise $1.32, or 3.1 percent, to $43.72.[16]
Wal-Mart seems to be something right in relation to other retailers. Its closest competitor, Target, posted a 4.4% drop in comparable sales for March. "We think Target is losing some of its market share to Wal-Mart as people trade down," said Jharonne Martis, retail analyst at Thomson Financial. It's quite a switch of trends.[38] Limited Brands Inc., Gap Inc., J.C. Penney Co., Kohl's Corp., Saks Inc. and Nordstrom Inc. all reported drops in March sales on Thursday. The news came a day after home furnishings retailer Bed Bath & Beyond Inc. warned its first-quarter profit would come in below the average analyst estimate.[12] On the gloomier side, March offered retail investors little reason for cheer as J.C. Penney (nyse: JCP - news - people ), Gap (nyse: GPS - news - people ) and Limited all reported a sharp drop in sales. "Discounters are going to continue to do well in this economy," Ken Perkins, president of RetailMetrics, a research company in Swampscott, Mass., told the Associated Press.[43] March proved to be another weak month for many others, however, including J.C. Penney Co., Gap and Limited Brands. All of them reported sharp drops in sales. "Discounters are going to continue to do well in this economy," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. "Anything that is discretionary is going to continue to be under pressure."[24]
The downbeat results were far from unexpected. The International Council of Shopping Centers (ICSC) recently lowered its sales forecast from an original projection of a 1% overall gain after sales in the week ended March 29 rose at their slowest pace in five years. The weak job market, higher gasoline and food costs, along with the declining housing and credit markets not only have eaten into shoppers' budgets, ISCS said, and have also have hurt their confidence in the economy and curbed their willingness to spend. [6] March sales fell a collective 0.5 percent compared with the same month last year, according to a composite compiled by the International Council of Shopping Centers, a New York trade group that measures monthly sales. It was the weakest March since 1995.[21] The International Council of Shopping Centers, a retail trade group, said March sales were the worst in 13 years.[23]
Overall same-store sales fell 0.5% during the month, the biggest decline in almost a year, the International Council of Shopping Centers said, based on a survey of 37 chains. It said the earlier Easter and cooler weather hurt demand for spring clothes.[29] Highlighting the weakness were Gap Inc. (GPS) and Kohl's Corp. (KSS), where same-store sales fell 18% and 15.5%, respectively. Kohl's also led a handful of retailers in cutting their quarterly expectations. Easter arrived this year at the earliest point on the calendar in 95 years, and shoppers weren't ready to think spring with winter ending just a few days earlier.[26]
Industrywide, sales were down 0.4% as about 71% of retailers missed forecasts for same-store sales - those open at least a year - according to Retail Metrics Inc., a Massachusetts research firm.[37] Analysts, on average, were expecting the company's same-store sales to fall 12.6 per cent, according to Reuters Estimates, while the retailer had forecast a decline in the low-double-digit range.[1] Analysts expected a 7.8% drop. Teen retailer Abercrombie & Fitch said sales retreated 10%. American Eagle said same-store revenue dropped 12% and cut its first-quarter forecast to as little as 18 cents a share from as much as 27 cents.[36]
The rebates start in May, part of a $168 billion government package to spur the economy. Sales at many U.S. retailers have slowed as consumers grapple with fuel prices, and soaring oil costs will make the industry "reconsider its model,'' Shewmaker said in a speech today. Wal-Mart raised its profit forecast Thursday after its price cuts lured cash-strapped shoppers.[17] BENTONVILLE, ARK. -- Wal-Mart Stores Inc., the world's largest retailer, raised its profit forecast for the first quarter, saying costs are being well managed and April sales should top prior expectations.[44] Wal-Mart Stores Inc. director Jack Shewmaker said a U.S. economic stimulus plan that includes tax rebates for 130 million households will give a "real boost'' to sales at the world's biggest retailer. Customers who cash rebate checks at the discount chain will probably spend them there, Shewmaker said in an interview in Barcelona Thursday. He joined Wal-Mart's board in 1977 and is a retired vice chairman of the company.[17]
Same-store sales at U.S. chain stores, considered the best indicator of a retailer's health, dropped 0.5 percent.[41] Department store performance was the worst of all types of stores measured by Thomson. Eight such chains had an average drop of 11. 2 percent in same-store sales.[23] Little Rock-based Dillard's Inc.' s same-store sales dropped 10 percent from a year ago, but it had plenty of company in the department store category.[23]
At Bon-Ton Stores, where same-store sales now include all units from the company's acquisitions from Saks Inc. and Belk, comps fell 5.3% in March.[45] Penney projected a mid- to high-single-digit increase for April. Stage Stores Inc. (SSI), parent of regional brands Peebles and Bealls, said its same-store sales slumped 10% last month, four times the drop analysts expected. As such the company cut its quarterly outlook.[26]
While a weakening economy contributed to flat same-store sales for retailers, it created opportunity for small convenience stores.[31] Walgreens posted a 4.4% hike in same-store sales, while Costco saw a 7% raise, giving rise to the theory that people only want to make short store trips, or to buy in bulk, in the troubled economy.[14]
Notable exceptions to the gloom were Wal-Mart and Costco. While Wal-Mart's same-store sales rose just 0.7 percent, it raised its first-quarter earnings outlook, citing cost controls and fewer markdowns. Costco's same-store sales rose 7 percent as shoppers filled their gas tanks at its low-priced warehouse clubs.[16] Costco, the largest U.S. warehouse-club chain, said March same-store sales increased 7 percent on international demand.[2]
Target reported strength in the health care, household, personal care, baby care, consumables and perishables categories. It saw same-store sales decline 4.4% during March, compared with a 12% gain a year ago.[28] Like many apparel retailers''that reported a decrease in same-store sales for March, Wal-Mart's apparel sector suffered.[31] Wal-Mart rival Target Corp. reported a 4. 4 percent decrease in same-store sales.[23] Minneapolis-based retail giant Target (NYSE: TGT) reported same-store sales were down 4.4 percent.[40]
Saks reported a 2.9 percent decline in same-store sales, worse than the 3.5 percent gain that Wall Street expected.[24] Gap's same-store sales dropped 18 percent last month, more than double what Wall Street had expected.[19]
Limited Brands reported an 8 percent drop in sales. Gap had an 18 percent drop in same-store sales, dragged down by a 27 percent drop at its Old Navy division.[25] Limited Brands reported an 8% drop in sales. Gap had an 18% drop in same-store sales, dragged down by a 27% drop at its Old Navy division. The Associated Press contributed to this report. From the April 11, 2008 editions of the Milwaukee Journal Sentinel Have an opinion on this story? Write a letter to the editor.[37]
"Gap (GPS) posted an anemic 18% while Costco (COST) registered a robust 7% comp followed by BJ's Wholesale (BJ) with 6%." The biggest of them all -- Wal-Mart (WMT) -- reported a 0.7% rise in sales at stores open at least a year, or 1.1% including fuel, boosted by sales of groceries, health care products and fuel.[6] As retailers reported sales results on Thursday, Wal-Mart Stores and Costco were among the few winners, as shoppers stuck to basics. Wal-Mart said its April sales should top expectations.[46] Only Wal-Mart Stores and Costo Wholesale Corp. reported positive sales in March, suggesting that shoppers are looking for bargains on essentials.[18]
The Johnson Redbook Same Store Sales Index (SSI) reported a 1.0% comp decline in March among the 40 mostly softlines retailers tracked, with 70% of the chains posting negative comps.[45] Apparel stores, department store chains and electronics retailers reported declining sales on comparable basis. For the most apparel retailers, this was their sixth monthly same store sales decline in a row.[4] The Menomonee Falls-based department store chain said it now expects first-quarter earnings to be in the range of 40 to 42 cents a share and sales to be in the negative high-single-digit range. "Sales in weather-sensitive businesses such as shorts, tanks, polos and sandals experienced significant declines on a comparable store basis, contributing to our sales shortfall.[37]
Double-digit comp store declines hit retailers square in the middle: Dillard's, Gottschalks, JCPenney, Kohl's and Stein Mart were the in the "steepest" club. It should be noted that Macy's no longer reports monthly sales - its quarterly figures are due out May 14. Even Ross Stores, which raised its 1Q earnings plan to the range of $0.56 to $0.58 from its prior $0.52-$0.54 (compared to $0.48 for the year-ago quarter), was contending in March with a comparable store sales drop of 2.0%.[45] For the nine weeks ended April 5, 2008, total sales decreased 3.2% and comparable store sales decreased 11.1%. The Company now expects its first quarter comparable sales to be in the negative high-single digit range and its earnings to be $0.40 to $0.42 per diluted share.[4]
U.S. stocks rose for the first time in three days on improved forecasts for technology company earnings and higher sales at discount retailers.[47] For April, the ICSC forecast a gain of 2 percent to 2.5 percent, representing a shift in spending rather than growth, Niemira said. "What is going to be most important for these retailers now is who is operationally most healthy,'' Sarah Henry, an analyst with MFC Global Investment Management in Berwyn, Pennsylvania, said in an interview. "Wal-Mart raised guidance not so much because of sales but because they were able to control expenses and maintain a good handle on inventories.''[2] Teen retailers' same store sales "have been declining over the last couple of months, suggesting consumers are not spending discretionary income. We expect to continue to see growth in those areas where consumers have less discretion, while retailers selling apparel and home goods, including the department stores, have been hurting."[6] The average is weighted for sales volume. The same-stores sales reflect a trend of consumers spending less on such nonessential items as some department store products, some analysts say.[23]
Department stores do particularly poorly, and sales at Old Navy stores fall 27%. U.S. retail sales were disappointing in March -- and people probably aren't changing their spending habits this month.[27]
Department stores of nearly all stripes failed to reel in shoppers. J.C. Penney saw sales skid 12.3 percent; Kohl's, based in Menomonee Falls, Wis., blamed weather-sensitive categories such as shorts and sandals for its 15.5 percent sales decline.[41] The results, based on sales at stores open at least a year, were the weakest since March 1995, when the industry registered a decline of 0.8 percent.[48] Sales in stores open at least a year rose 0. 7 percent, not counting fuel, for the Bentonville-based retailer.[23] Sales at Dillard's stores open at least a year dropped 10 percent for the five-week period.[8]
Fort Myers-based Chico's FAS Inc. on Thursday reported March sales dropped 15.2 percent to $162.1 million from $191.2 million a year ago.[9] NEW YORK (AP) - Share of specialty retailers were mixed in early trading Thursday, as most of the nation's retailers reported sluggish March sales.[39] The SP Retail Index rose 1.8% as Wal-Mart ( wmt ) hit a fresh three-year high. "The reaction to the retail data reflects investors taking this data as old news and looking for some evidence of improvement from other areas of the economy," said Liz Miller, managing director at investment management firm Trevor Stewart Burton Jacobsen. While March sales were dismal, they weren't as bad as the market feared, Perkins said.[15] While Target's March sales fell short of analysts' expectations, Wal-Mart's were in line.[38] Target Corp. said Thursday that its March same-store sales missed expectations, partly due to an earlier Easter.[40] J.C. Penney (JCP) was among the worst hit as March same-store sales fell 12.3%, due to weaker traffic through the Easter holiday.[6] Kohl's Corp. said same-store sales for March fell 15.5%, as cold weather cut into sales of seasonal clothing.[37]
Kohl's also faced difficult comparisons, reporting that same-store sales plunged 15.5%, compared with a 16.8% increase in March of last year.[28] Saks Fifth Avenue saw same-store sales slide 2.9%, compared with a 10.1% jump in March of last year.[28]
Last year March-April comps rose 2%. Weakness was widespread last month, with even high-end chains such as Saks ( sks ) and Nordstrom ( jwn ) reporting lower same-store sales. "It's not discriminating against the high end, low end or middle," Niemira said. "That's why it's so worrisome; it's truly broad-based. The luxury market was the pillar of strength, but it's not anymore."[15] Gap Inc. saw same-store sales plummet 18%, compared with a 6% rise during the same period last year.[28]
For the month, apparel-specialty chain store sales, on a same-store basis, fell 11.2% year over year, with Chico's FAS dropping 20.7% and the Gap down 18%.[14] Gap Inc store sales declined 18% and sales at Old Navy chain plunged 27% and at domestic Gap stores fell 14%.[4]
Clothing retailers Limited Brands Inc., Gap Inc. and American Eagle Outfitters Inc. posted sales declines greater than analysts anticipated. Shoppers are switching to Wal-Mart and restricting their purchases to food and health products instead of buying spring fashions.[2] WSI's holdings represent an eclectic mix of companies that supply the everyday needs of consumers. That variety of food, household supplies and toys are reflected in its top holdings, which includes Mattel MAT, Kellogg K, General Mills GIS, Clorox CLX and Activision ATVI. While the major suppliers to the nation's largest retailer will maintain their respective sales volumes, assuming price-conscious shoppers keep visiting Wal-Mart during the economic downturn, they might not be completely immune from pressures on their profit margins. The retail colossus also has a reputation for squeezing every possible percentage point from its suppliers' margins.[5]
Merchants faced a slew of obstacles to improving sales: record gas prices, rising food costs, a weaker job market, slumping home prices and an early, frigid Easter. The weather may be warming now, but the rest of those problems aren't likely to dissipate soon. "Consumers are buying what they need," said Jennifer Black, president of Jennifer Black & Associates, an equity research company in Lake Oswego, Ore. For everything else, shoppers are being pickier and focusing on discounters, she said. According to a preliminary tally by UBS-International Council of Shopping Centers, sales slid 0.5 percent versus its original estimate of 1 percent growth.[25] Under other circumstances, Easter shopping could have boosted March sales results, spurring early consumer demand for spring merchandise. The holiday was March 23 this year, two weeks earlier than a year ago, and it came during a cold, damp month when many consumers were still wearing coats, sweaters and boots.[1] Part of the blame falls on the calendar: The earliest Easter in 95 years meant that retailers lost a shopping day in March that usually falls in April. It's a shift that affects comparisons with last year's monthly sales, a key indicator of a retailer's financial health.[41]
Only wholesale clubs and drug stores turned in positive numbers. What had been expected: We were looking for weak or even no growth, indicating sales during March were just about what they were last year.[34] Excluding Wal-Mart Stores Inc., which increased 0.7%, sales were down 1.6%. Overall, sales were the worst since April of last year, when they dropped 1.8%.[37]
The world's largest retailer said the growth was driven by sales of groceries, health and wellness products, and entertainment. "Customers continued to turn to Wal-Mart for price leadership throughout the store, and they continued to see a better shopping experience," said Eduardo Castro-Wright, head of Wal-Mart's U.S. stores.[19] Associated Press Rosemary Lyons loads bags into her trunk after shopping at a Wal-Mart in Clarence, N.Y., yesterday. Consumers concerned about rising fuel prices have fled shopping centers for discount retailers such as BJs Wholesale and Costco. Consumers fled shopping centers and chain stores last month in favor of discounters as the weakening economy weighed on their minds and shrank their discretionary income.[21] Costco and Wal-Mart are the only two retailers with monthly same store sales increase for eleven months in a row as consumer change buying preferences for groceries, health and beauty aids and gasoline.[4]
Costco Warehouse ( COST: chart ) reported March same store sales increased 7% across all stores and at domestic stores rose 3%.[4] Costco Warehouse Corp. (COST) reported a 7% rise in March same-store sales, not showing the weakness smaller rival Sam's Club did.[26] Costco Wholesale ( cost ) said same-store sales rose 7% while BJ's Wholesale ( bj ) saw a 6% gain. Both came out ahead of views.[15] Warehouse-club giant Costco said same-store sales rose 7%, helped by higher gasoline prices and strength in foreign currency. U.S. same-store sales rose 5%, and they were up 17% internationally.[29] The Issaquah, Wash. -based company said same-store sales rose 7%--better than analysts had expected, thanks to higher gas prices and the dollar's weakness.[43] The average estimate of analysts polled by Thomson Financial had been for the company to post same-store sales growth of 1%.[6]
Looking ahead, the company expects April same-store sales to rise in the mid-single digits with the combined March and April periods posting same-store sales at the low end of a range of a 1% decline to a 1% rise.[6] Rival Target Corp., which has been stumbling lately, posted a 4.4 percent decline in same-store sales.[25] Chief rival Target ( tgt ) saw a 4.4% decline in same-store sales. It expects April comps to rise 4%-6%.[15]
TJX Cos., the owner of the T.J. Maxx and Marshalls discount chains, said same-store sales were unchanged. The retailer said first-quarter profit may fall short of its previous forecast. Same-Store Sales Same-store sales are seen as a key gauge of a retailer's performance because they exclude locations that have recently opened or closed.[36] Sales tracker Thomson Financial, which compares monthly sales results at 36 of the nation's largest retail chains based on analysts' estimates, said more retailers were missing rather than beating forecasts. The firm said 35 out of the 39 retailers had so far reported their sales results Thursday. Of those, 75% had missed their forecasts while 25% beat.[13]
In March, apparel giant Gap Inc. suffered an 18% decline in sales, more than twice the drop analysts polled by Thomson Financial were expecting.[27] Abercrombie & Fitch suffered a 10% same-store sales drop while sales at Gap Inc ( GPS, Fortune 500 )., the No.1 clothing seller, plunged 18%.[13] "People are just not spending. Whether people are directly impacted by the current economic environment or not, they're thinking about it." Gap Inc., which has been struggling to redefine its merchandise mix, saw same-store sales plummet 18%, compared with a 6% rise during the year-ago period.[28]
Same-store sales decreased 5.3% from the period a year earlier, while overall sales for the five weeks were off about 4.9% to $274 million.[37] Total retail sales for the five weeks ended April 5, increased 1.5 per cent to $US5.68 billion from $US5.59 billion a year earlier.[1] Target ( TGT: chart ) reported net retail sales for the five weeks ended April 5, 2008 increased 1.5% to $5.7 billion from $5.59 billion for the five weeks ended April 7, 2007.[4]
Chico's ( CHS: chart ) reported March sales for the five-week period ended April 5, 2008, decreased 15.2% to $162.1 million from $191.2 million reported for the five-week period ended April 7, 2007.[4] Overall March sales fell 10.3% last month at the $19.9 billion mid-tier giant. JCP said of its swing-for-the-fences partnership with Polo Ralph Lauren, "Customers are responding positively to new American Living product across all categories in which it is available," which include a full range of bed and bath collections.[45] March sales of food and health products outweighed softness in apparel and home goods, the retailer said.[36] Uneasy shoppers steered clear of nearly everything but the basics last month, delivering the nation's retailers the worst March sales results since 1995, according to the International Council of Shopping Centers.[41] A preliminary tally by released by the International Council of Shopping Centers had sales down half a percent. That's the weakest showing since March 1995.[42] A survey by UBS-International Council of Shopping Centers showed that retail sales dipped 0.5 percent, the poorest showing since March 1995.[18]
Released on March 25, the most recent Conference Board Consumer Confidence Index survey indicated that consumers expect the upcoming 12-months' inflation pace to be 6.1 percent. According to a March 28 International Council of Shopping Centers retail analysis report, this is an indication of a "deep-seated worry" among consumers that impacts the economy by causing consumers to be more cautious about their spending on apparel, eating out and other goods and services.[31] The slumping economy has caused major retailers, including Wal-Mart, to pull back on store expansion plans. Michael P. Niemira, chief economist at the International Council of Shopping Centers, says rebate checks may give retailers a breather, but he predicted a recovery won't happen soon.[18] Michael Niemira, International Council of Shopping Centers chief economist and director of research, said in a press release: "Weakness was evident in the apparel, department store and luxury sectors ''' but on a positive note, we did see some strength in the grocery store, drug store and wholesale club sectors."[31]
Sales declines were seen in most merchandise categories, the department store operator, which has been hurt by the weak U.S. economy, said.[1] Target Corp. (TGT), whose sales downturn has roughly coincided with the economy's stutter, posted a bigger-than-expected 4.4% decline. Brian Sozzi, analyst at Wall Street Strategies, said the results portend a higher probability of Target not meeting its first-quarter earnings target.[26] The average estimate of analysts polled by Thomson Financial had been for Target's same store sales to decline 2.7%.[6]
Of the 42 retailers tracked by 123jump.com, 39 reported at least one month of sales decline and only two retailers reported same store sales gains every month since May 2007.[4] Excluding the effect of the shift in the Easter holiday, the retailer believes the overall comparable store sales results for March would have been down between 18% and 19%.[4] TJX is the only other retailer with a rising same store sales in ten of the eleven months in a row and flat sales in March.[4]
It was cold outside, and cold inside last month: Retailers saw their worst March sales in 13 years.[41] Actual: Sales declined 0.5 percent from the same time last year, making this the worst March since 1995.[34] Niemira expects that for the combined March-April period — retailers' key spring selling period — sales will be up only about 1 percent. That pace is below the 2.1 percent average seen last year, which was slower than the 3.6 percent figure in 2006.[25] Year-to-date, the retailer reported a net sales increase of 4% to $559.1 million from $537.8 million last year.[4]
FYI: Bouncing holidays tend to distort to numbers -- for instance, April is likely to suffer in comparison to last year because of the early Easter holiday. Chain-store sales represented in this report only account for about one-third of non-auto retail sales, and only about 15 percent of total personal consumption.[34] With the Easter calendar shift affecting March and April sales every year, many analysts say that simply looking at March alone would paint too bleak a picture. This year, they also said that looking at April sales alone may paint too rosy a picture.[1]
In part because of the Easter shift, Wal-Mart sees overall U.S. same-store sales excluding fuel up 1% to 3% in April.[26] Wal-Mart also reported triple-digit increases in same-store sales of flat-panel televisions and GPS units and double-digit increases in laptop computers, video games and cameras.[23] Discount giant Wal-Mart saw only a 0.7% rise in same-store sales, short of views.[15]
With a few exceptions, the teen-focused retailers took it on the chin, Thomson noted, with Abercrombie & Fitch (ANF) reporting a 10% drop in same-store sales.[6] Same-store sales at the retailer rose a modest 0.7%, compared with a 4% rise during the year-ago period.[28] The strongest region was the Northeast, while sales were weakest in the Western U.S. Total sales rose 1.5% to $5.68bn. It expects April same-store sales to increase in the mid-single digits, and expects that, on a combined basis, the March-April same-store sales will be at the low end of a negative 1% to positive 1% range.[29] Excluding gasoline price inflation, it said U.S. same-store sales would have been up 3%, and international sales were up 6% on a local currency basis.[29] Same-store sales climbed 5% in the U.S. with gas making up two percentage points of the gain.[26]
Niemira sees April same-store sales up 2%-2.5%. Even at the high end of his estimate, total March and April same-store sales would be just 1%.[15] March 2007 same-store sales jumped 6% vs. 2006. Comparisons will be easy this month.[15]
As the nation's merchants reported March's sales figures Thursday, it was clear that shoppers had remained focused on buying basics at discounters and wholesale clubs and snubbed mall-based chains for clothing and other discretionary purchases.[24] U.S. discounters and wholesalers reported a rise in March sales, as cash-strapped customers continued looking for discounts on food and electronics.[29] High gas prices, economic worries and an early, cold Easter combined to produce the weakest March sales report in more than a decade.[21] Warehouse club operator Costco Wholesale Corp. also witnessed a sharp rise in March sales.[12] Previously Wal-Mart said April sales would range from flat to up 2%. Another bright spot Thursday was Costco Wholesale (nasdaq: COST - news - people ).[43]
Wal-Mart Stores Inc. and Costco Wholesale Club Corp. advanced as consumers sought discounts on food and electronics.[47] Wal-Mart Stores Inc. and Costco Wholesale Corp. were among the best performers. Wal-Mart raised its earnings outlook, noting that better inventory control helped to limit markdowns on merchandise.[24]
Federal regulators on Thursday fined Wal-Mart Stores Inc., Best Buy Co. Inc., and other retailers $3.9 million combined for failing to properly label that analog-only televisions will need to be retrofitted after the switch to digital TV next year.[10]
Wal-Mart fell 12 cents to $54.54 in early New York Stock Exchange composite trading. The shares gained 15 percent this year through Thursday, compared with the 3.5 percent drop by the Standard & Poor's 500 Retailing Index.[17] Target fell 4.4%. Share Performance Gap, which reiterated its annual profit forecast, fell 42 cents, or 2.2%, to $US18.47, while Wal-Mart climbed 52 cents to $US54.66 at 4.15pm in New York Stock Exchange composite trading.[36]
Wal-Mart's stock closed Thursday at $54. 66 a share, up 52 cents or 0. 96 percent, on the New York Stock Exchange.[23] Dillard's stock closed at $21. 14 a share, up 64 cents or 3. 12 percent, on the New York Stock Exchange. It has traded as high as $40. 56 and as low as $14. 19 in the past year.[23]
NEW YORK -- Shares of broadline retailers closed up on Thursday as Wal-Mart Stores raised its first-quarter profit outlook. [33] Officially, "Inventory in Wal-Mart Stores U.S. has been well managed and has resulted in lower markdowns, expense leverage and reduced shrink," or external or internal theft or accounting errors, Chief Financial Officer Tom Schoewe said in a statement. The company raised its guidance to a range of 74 cents to 76 cents a share from a previous projection of 70 cents to 74 a share.[38] By late-afternoon trading, Wal-Mart shares were up 0.7%, or 39 cents, to $54.53. "It has been improving general store standards, improving the front-end store experience, merchandising, marketing, inventory control and labor scheduling," Binder said. "For the first time in several quarters you see Wal-Mart continue to show better margins because it's not choking down on a lot of bad apparel and home inventory."[43]
Costco increased 49 cents to $66.52. Wal-Mart has gained 15 percent this year, while the Standard & Poor's 500 Retailing Index has declined 3.5 percent.[2]
Retail diesel, the fuel of trucks, trains and ships, rose overnight to a national record of $4.045 a gallon. With little money left after buying food and fuel, American shoppers handed most retailers their most dismal March in 13 years.[22] BCCC's Upper Bucks Campus is located at One Hillendale Drive, Perkasie. With little money left after buying food and fuel, American shoppers handed most retailers their most dismal March in 13 years.[10]
Apparel retailers suffered one of the worst declined in years, and for the most of the retailers in the sector sixth monthly sales decline in a row. [4] Poor sales at Dillard's had been among the complaints of New York-based Barington Capital, an investor that had been demanding change over the past year. Barington and another investor had proposed their own candidates for election to Dillard's board of directors at the retailer's annual shareholder meeting, scheduled for next month. The investors and Dillard's worked out a compromise by which they both would support a new slate of candidates.[23] NEW YORK (AP) — Wall Street rose as investors, encouraged by lower unemployment claims and better-than-expected sales data for discount retailers, bought back into stocks.[3] NEW YORK -- Stocks fluctuated Thursday as investors weighed mixed sales figures from major retailers and a drop in unemployment claims.[12]
Nordstrom saw sales drop off 9 percent. Neiman Marcus held its own among luxury retailers, eking out a 0.4 percent rise.[41] Limited Brands reported an 8 percent drop in sales, larger than the 7.2 percent decline that analysts had expected.[24] Nordstrom Inc. saw sales drop 9.1%, 1.8 percentage points more than anticipated, while Saks Inc. logged a 2.9% decline, instead of the 3.5% gain analysts had predicted.[27]
Sam's Club was down so little, you can blame all of it on Easter. Sales rose so much as Wal-Mart, the company revised its profit forecast upward. [49] Wal-Mart, domestic stores sales, rose 0.9% on rising sales of groceries and pharmaceuticals.[4] A close relationship with suppliers and daily sales updates for store managers enable Wal-Mart to adapt quickly to changes in demand, Shewmaker said. "Partnership with suppliers is more important during these times,'' he said in the interview.[17]
Author: 123jump.com Staff 123jump.com Last Update: 7:06 PM EDT April 10 2008 Same store sales in March lagged, as consumers held tight grip on their wallets.[4] Analysts said Thursday that a struggling economy has shifted consumer focus away from expensive, non-essential items to more affordable basics, accounting for a rise in March sales''by big-box discount retailers and convenience stores while other stores slipped.[31] The Labor Department said nonfarm employment fell by 80,000 jobs in March, marking the third straight month that U.S. employers cut payrolls. With consumers worried that the economy either is in, or is teetering on, the verge of recession, they are passing over purchases of nonessential items, like furniture or clothes, in favor of basics, like laundry detergent and pasta sauce.[1]
Treasury Secretary Henry M. Paulson Jr. said yesterday that the U.S. economy has "turned down sharply" and may weaken further. His gloomy comments were reflected in new retail sales figures that were released at nearly the same time as a speech he delivered in Washington.[19] Michael Niemira, ICSC's chief economist, said the latest retail sales snapshot shows consumers are concerned about the economy.[20]
"Due to the Easter shift and weak economic conditions, the retail industry faced a difficult sales environment in March," said Michael P. Niemira, chief economist and director of research at the ICSC.[21] The retail industry already had been bracing for a weak March because Easter landed two weeks earlier than last year, on March 23, when winter weather still gripped most of the country. It was the earliest in 95 years, and meant one less shopping day in March compared with a year ago.[37] Plus, the arrival of Easter in March instead of April like last year meant retailers lost one selling day.[6] An earlier Easter and accompanying cooler weather hurt demand for spring clothes, the New York-based ICSC said. Easter fell on March 23 this year, compared with April 8 last year.[36]
Sales fell noticeably at Target, J.C. Penney, and specialty apparel chains. It was a different story at discount chains. The new frugality was good for them. [49] Department-store sales were off by 8.2%, and luxury-department-store business was down 5.3%, with Kohl's dropping 15.5% and J.C. Penney down 12.3$. Discount-store sales fell 0.3%, with both Family Dollar and Target dropping 4.4%, but Wal-Mart moving up 0.9%, the report said.[14]
Retailers who saw slumping sales included Gap, J.C. Penney, Kohl's, Nordstrom, Saks and Target.[18]
The Minneapolis-based retailer said net sales for the five weeks ended April 5 increased 1.5% to $5.68 billion from $5.59 billion.[6] Total sales at Bentonville, Ark. -based Wal-Mart were up almost 8% in the four weeks ended April 4, to $36.97 billion from $34.26 billion.[6] For the five weeks that ended April 5, Kohl's sales totaled $1.43 billion, down 7.9% from a year ago.[37]
The Texas-based company said total sales fell 10.3 per cent to $US1.54 billion in the five-week reporting period ended April 5.[1] Comparative sales also fell at Bon-Ton Stores Inc., the York, Pa., parent company of Boston Store, Elder-Beerman and Younkers in Wisconsin.[37]
Chico's officials said same store sales probably would have been down by 18 to 19 percent if Easter hadn't been part of it.[9] Stores blame early Easter and cooler temperatures for sagging sales in the month.[13]
The Easter shift is expected to boost the year-over-year comp sales for April by 2% to 2.5%, though record-high gasoline prices and economic distress may curb consumer discretionary spending, the ICSC report says.[14] The earliest Easter in almost a century may have brought forward seasonal spring sales, distorting revenue figures Wal-Mart reported Thursday, Shewmaker said. Easter has "kicked off the spring season early'' and April sales data will bring a "clearer picture,'' he said.[17] Costco and Wal-Mart are the only two among 42 retailers tracked by 123jump.com to report eleventh monthly sales rise in a row.[4] Investors who feel that WSI makes sense as possible insulation from an economic downturn must decide if the possibility of maintenance of sales volume by Wal-Mart suppliers is worth the risk that the retailer may squeeze profits from companies in the ETF's portfolio.[5]
WASHINGTON (AFP) — The housing downturn, a lack of once easy credit and rocketing gasoline prices sapped Americans' wallets and purses last month as retailers across the country reported lower sales.[20] The U.S. comparable sales figure includes, among other things, the effect of gasoline price inflation, with the average sales price per gallon of gasoline up 20% for the five-week month of March, as compared to the year-earlier March.[4] The weather was abnormally cool in March. Shoppers were not in the mood to freshen their wardrobes with new spring duds, hurting apparel sales.[15] Convenience store sales reached a new high of $577.4 billion in 2007, according to a press release from the''National Association of Convenience Stores.[31] Comparable store sales decreased 20.7% for the five-week period ended April 5, 2008 compared to period a year ago.[4] Janet Hoffman, managing partner of the North American retail division of Accenture, and other analysts think any sales lift at stores will be temporary, however.[24] Keri Spanbauer, senior equity analyst with Thrivent Investment Management in Appleton, said comparable sales at Kohl's, which has many stores in the Midwest, are sensitive to weather. "That said, that's a pretty weak comp. It's one of the weakest ones I have in my records for them," she said.[37]
Behind the headlines: The report details sales in specific categories; during February, for instance, sales were strongest at discount stores, which tells us consumers are cutting back.[34] Costco continued to report rise in same store sales, eleventh monthly increase above 6% in a row.[4] Of the 15 chains with monthly sales reports tracked by HTT, four had positive comps: Costco, Sam's, Fred's and Wal-Mart.[45] The firm's Sam's Club chain posted a 0.7% drop because of losing a day of sales to Easter closures. That hurt sales by up to 2.5 percentage points, the company said.[26] The company expects April same-store sales, excluding fuel, to rise 1% to 3%.[43] For April, Target said that it expects same-store sales to rise in the mid-single-digit range, and will be aided by an extra day of sales.[40] Saks Inc. (SKS), the segment's lone bright spot of late, was the only department-store operator expected to post higher same-store sales. It wasn't able to escape the downdraft either, reporting a 2.9% decline.[26]
Hot Topic, Sharper Image and Chico's are the three retailers to report worst declines in sales for the last eleven months in a row.[4] The Bentonville, Ark. -based company's news contrasted with generally weak sales reports and outlooks from other retailers yesterday.[44] The Arkansas-based retailer said food sales had helped it survive what had been a difficult period for other firms.[20] According to a preliminary sales tally by Thomson Financial, 17 retailers missed sales expectations while only six merchants beat estimates.[24] Overall sales actually fell 0.7% in March versus Thomson Financial's initial estimate for a 0.1% increase.[13] Sales at Pacific Sunwear of California Inc. in Anaheim fell 8%, instead of the 1.7% analysts were expecting.[27] Saks Inc. said sales declined 2.9 percent. Analysts expected them to rise by that amount.[2] At the high end, Saks dropped nearly 3 percent, shocking analysts polled by Thomson First Call, who had expected sales to rise 3.5 percent.[41]
Despite''the general''concerns about the economy, Niemira predicted April sales will increase between 2 percent and 2.5 percent.[31] Exports also set a record, rising by 2 percent to $151.4 billion, reflecting strong gains in the sale of American-made heavy machinery, computers and farm goods.[46] According to a preliminary tally by UBS-International Council of Shopping Centers, sales slid 0.5 percent.[10] Costco posted a 7 percent gain in sales, higher than expected, with much of the gain coming from gasoline sales.[25]
According to some counts, sales of new vehicles in the United States are at the lowest ebb in 15 years.[20]
"You compare that with J. C. Penney and Kohl's, down low double digits. It's tough for department stores or near-department store competition.” A rising U. S. unemployment rate, trouble in the credit markets and other larger economic issues are causing consumers to hold back, Thomson's Jharonne Martis wrote. Easter also made things tougher, landing two weeks earlier on the calendar than in 2007, so consumers were seeing shorts and other spring merchandise earlier in the year, she said.[23] Discount retailers saw surge of new customers as consumers shifted away from department stores.[4]
New York - Why not start with some good news? Ross Stores had such a good first quarter, the 918-unit off-price retailer raised its first-quarter earnings guidance.[45]
"Our initiatives in electronics have improved customer access to leading brands and made Wal-Mart the retailer of choice for entertainment products," Eduardo Castro-Wright, U. S. stores president and chief executive officer, said in the company's statement. Grocery and health and wellness products were other strong areas, Wal-Mart said, while home and apparel, except for such basics as T-shirts, were weak.[23] Wal-Mart has withdrawn plans to build a Supercenter on 22 acres the company bought last year on the south side of Delaware, the seat of Ohio's fastest-growing county. Company officials announced yesterday that they are no longer pursuing the store site near the southeastern corner of Rt. 23 and Cheshire Road, Delaware spokesman Lee Yoakum said.[32] The project received preliminary approval from Delaware City Council in June. "The next step was final approval, and we were in contact with them as late as a few weeks ago regarding what their plans were," Yoakum said. The company's decision to pull its plans is related to an announcement last year that it will "more strategically prioritize development of Supercenters," according to a Wal-Mart news release.[32]
The average U.S. price of gasoline was $3.33 in the week ended April 7, up 19 percent from a year earlier. [2] Rates have been below 6 percent for four straight weeks. U.S. retail gas prices extended their record run Thursday, adding to the pain consumers feel every time they fill up.[22]
Gold prices rose, while the dollar fell. The Bank of England lowered its base lending rate by a quarter-point to 5 percent, the lowest level in 17 months, while the European Central Bank left its rates unchanged. In other corporate news, Yahoo Inc. and Time Warner Inc.' s AOL are close to a deal to combine their Internet operations, The Wall Street Journal reported, citing unnamed sources.[12] The Labor Department reported a loss of 80,000 jobs, the most in five years, and the national unemployment rate rose to 5.1 percent from 4.8 percent. Although many economists think the country is in a recession, the Bush administration says growth should revive this summer when 130 million households start spending their economic stimulus checks.[24] U.S. payrolls shrank by 80,000 in March, the most in five years, sending the jobless rate up to 5.1 percent, the Labor Department said April 4.[2]
The Commerce Department reported Thursday that the deficit between what the U.S. imports and what it sells abroad rose 5.7 percent to $63.2 billion in February, the highest level since November.[46]
Abercrombie & Fitch ( ANF: chart ) reported net sales of $330.2 million for the five-week period ended April 5, 2008, compared to net sales of $331.2 million for the five-week period ended April 7, 2007.[4] Eastern Consolidated is the largest single-office real estate investment services firm in the U.S. with nearly $3B in annual sales. It is recognized internationally for its signature deals, its core of experienced brokers and its ability to handle a wide variety of sophisticated transactions.[14]
Elsewhere, the disappointments were more pronounced. Limited Brands ( LTD, Fortune 500 ), owner of Victoria's Secret and Bath & Body Works chains, and teen apparel chain Pacific Sunwear ( PSUN ) both logged an 8% sales decline.[13] The San Francisco-based parent of the Gap, Old Navy and Banana Republic chains saw sales fall in all divisions.[27]
In tough times, food drives traffic better than clothing, furniture and jewelry. Target has been expanding its food offerings at all stores, not just at SuperTargets, and reported strong results in consumable and perishable items in March. [41] Beyond Buckle Inc. (BKE) - which has posted strong growth in recent months and reported a 21% surge for March, double analysts' forecasts - most teen and child retailers posted weaker-than-projected results.[26] Seven in 10 retailers missed forecasts, the worst showing in nearly a year, according to Retail Metrics, a Massachusetts sales-tracking firm. "It's a retail blood bath is what it is," said Britt Beemer of America's Research Group, which surveys consumers every month. "It's not going to get better for another 14 or 15 months, until a year from Memorial Day," Beemer predicted.[41] March's loss is expected to be April's gain, as many retailers will likely show sizable gains from a year earlier. As such, combining March and April's results will give a better read on the state of the consumer.[26] "With consumers' wallets firmly closed and an earlier Easter, colder weather and the most difficult comparisons of the quarter for most players in place, March had all the ingredients for the weakest results in the last few years. and it did not disappoint," Eric Beder, senior VP at Brean Murray, Carret & Co., wrote in a research note.[28]
Spending by U.S. consumers, which has sustained the economy during housing's worst slump in a generation, rose at the slowest pace in more than a year in February, stoking concern the country will enter a recession.[17] U.S. consumer spending, which accounts for more than two- thirds of the economy, has also been hurt as gasoline prices have reached a record and food costs have soared.[36] The ability of U.S. consumers to keep spending is being tested by rising food costs, high gasoline prices, falling home values, a credit market crunch and a weakening job market.[1]
Consumer spending is a vital motor for the U.S. economy because it accounts for around two-thirds of all economic activity.[20] "Looking forward to April, record-high gasoline prices and consumers' worry about the economy will continue to curb discretionary spending power," said Michael Niemira, chief economist and director of research at ICSC.[28]
Excluding Wal-Mart, the index declined 2.2%, double the drop expected. "It is evident that consumers are holding back on spending due to macroeconomic issues, especially due to the rising unemployment rate and the deteriorating credit markets," said Thomson, which noted three-quarters of retailers missed expectations.[26] Upscale retailers were not immune: Nordstrom fell by 9 percent, and Saks dipped nearly 3 percent. "The reality is that shoppers are stepping up their plans to cut back spending," said Frank Badillo, senior economist at consulting firm TNS Retail Forward. "So we'll likely see more of these weak retail numbers in the coming months."[19] Michael P. Niemira, chief economist at the International Council of Shopping Centers, says that the malaise could continue into 2009. The rebate checks, he says, will "buy retailers some time," but without an improvement in key areas like housing, a recovery in spending won't happen anytime soon.[25] Last month's numbers came in at the weakest level for March in 13 years, said the International Council of Shopping Centers.[26]
Cash-strapped shoppers shunned apparel and other discretionary purchases in March, stocking up instead on groceries and other basics at discounters like Wal-Mart as the economy swooned. [16] The soft economy, an early Easter and cool weather kept shoppers out of the stores last month.[15]
Shoppers turned away from clothes shopping at Bon-Ton and Carson's stores, according to Tony Buccina, former president of Carson's who is now president of the merchandising division of York, Pa. -based Bon-Ton Stores. Separately, a group of funds managed by Mario Gabelli's Gamco Investors on Thursday reported that they hold a 5.19 percent ownership stake in Bon-Ton Stores.[18] The rule is to keep consumers from buying TV equipment that will not work after the digital switch by Feb. 17, 2009. RATES ON LONG-TERM MORTGAGES ARE UNCHANGED Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 5.88 percent this week, unchanged from last week.[10]
"The consumer is stressed, and you're starting to see that," said Pete Hastings, a Memphisbased retail bond analyst for Morgan Keegan. "Wal-Mart ended up in favorable territory and raised their earnings estimate," he said.[23] Wal-Mart now expects earnings of 74 cents U.S. to 76 cents a share for the three months ending April 30, up from 70 cents to 74 cents a share predicted earlier.[44] The company's earnings view was raised to 74 cents to 76 cents a share from 70 cents to 74 cents.[26]
Shares of Chico's closed at $6.36, a new 52-week low, down 4 cents from Wednesday's close of $6.40.[9] If the $3.40 estimate is right on, the stock's price-to-earnings ratio is about 16. That makes it more expensive than shares of many retailers, but it's a far cry from the valuation investors gave Wal-Mart in the late 1990s.[30] ''In times of trouble, Wal-Mart shines,'' said Patricia Edwards, who helps manage more than $US14.5 billion at Wentworth, Hauser & Violich, including Wal-Mart shares. ''I don't think anyone down there is cheering the recession, but it's certainly helping their business.''[36]
Bharti plans to spend as much as $2.5 billion (Rs 10,000 crore) on the retail venture, which it plans to develop independently of Wal-Mart as foreign investment in retailers is mostly barred.[35] There are "hundreds of things'' Wal-Mart should consider doing differently to cut costs, Shewmaker said in a speech at the World Retail Congress in Barcelona today. Soaring oil prices will be a "huge factor'' for all retailers, he said.[17]
Bharti Group, Wal-Mart Stores Inc's partner for a domestic wholesaling venture, plans to announce its strategy and brand name for a proposed retail chain this month. Bharti, which is starting the retail chain independently of the Wal-Mart venture, would open its first store as a small supermarket covering 2,000 sq ft of space, Rajan Mittal, managing director of Bharti Enterprises, said in an interview at the World Retail Congress in Barcelona today.[35]
Wal-Mart also has a higher percentage than Target of stores that sell groceries, Brennan said.[41] The research is done each month and the latest go-round "showed a sharp reversal in trends," Shapira said, "with Wal-Mart pricing less aggressively than Target across a majority of categories, including key traffic drivers such as food and health, and beauty." It's been a good day for the stocks of retailers.[38] Wal-Mart's stock rose 1.7% to $55.07 and Target's stock rose 1.7% to $53.25.[38]
"Softness continued in the home unit" was the pithy refrain at Wal-Mart, while overall trends were good enough to move evp and cfo Tom Schoewe to announce the elevated guidance of EPS "from continuing operations for the first quarter of fiscal year 2009 to a range of $0.74 to $0.76. This is an increase from the previous earnings guidance of $0.70 to $0.74."[45]
Looking ahead, opinions are mixed on whether the retail slump will continue. Mr. Beder's outlook for April is "somewhat brighter," given the fact that few retailers have reduced their earnings estimates for the first quarter, in the face of the dreary March results.[28]
CEO Scott Edmonds said at the time the company expects the retail environment to remain difficult through the first half of 2008. In January, the company announced a hiring freeze on all "shared services" jobs - those that serve all brands. It employs more than 1,000 people at its Metro Parkway headquarters and local call center. Chief Financial Officer Kent Kleeberger also told analysts in the same conference call that the company "definitely expects to be profitable" in the first quarter of this year.[9] The apt saying here may be, don't discount the discounter. The reason Wal-Mart is able to boost expectations is because the company is " benefitting from trade down, so they are able to maintain low-single-digit comps," said David Strasser, retail analyst at Banc of America Securities[38]
An interesting fund opportunity exists for believers that Wal-Mart might provide a refuge from the uncertain economic climate, but who desire the diversification provided by an investment in a portfolio of holdings. The FocusShares ISE-Revere Wal-Mart Supplier Index ETF WSI tracks the performance of companies that derive a substantial portion of their respective revenues from Wal-Mart. It has the advantages of a linkage to the retail giant's possible immunity to a recession as well as diversification spread across the spectrum of consumer purchases.[5] The bigger culprit lies with jittery consumers who face tighter credit, an unstable job market and rising prices for basics. "I'm a little surprised Target is being hit as hard as they are, because of their target market," said David Brennan of the Center for Retailing Excellence at the University of St. Thomas. "But Wal-Mart has redoubled its efforts on price and efficiencies, and it's hitting home."[41] Worries about the deteriorating economy, along with soaring gasoline prices, conspired to limit much of consumers' shopping to food and other essentials.[28] Demand for steaks has declined -- think ground beef." An increasing number of economists believe the world's largest economy will endure a recession during the first half of this year, especially if the legendary American consumer cuts back on shopping trips to the mall.[20] Analysts said that rising unemployment levels may have persuaded some consumers to rein in spending and save more cash for a potential "rainy day" fund. Despite growing recession worries, some economists are optimistic that a flurry of Federal Reserve interest rate cuts and a gargantuan 168-billion-dollar economic stimulus will help fire up economic momentum later this year.[20]
The mixed readings on consumer spending arrived as oil prices trade near record highs and banks reveal more trouble with the credit markets. Lehman Brothers Holdings Inc. disclosed in a regulatory filing Wednesday that it liquidated three funds because of the tight credit markets and bought the assets of those funds, valued at $1 billion, on Feb. 29.[12]
Crude oil fell more than USD 1 a barrel in New York on signs that high prices and a slowing economy will curb U.S. fuel consumption. [47] Light sweet crude fell 63 cents to $110.26 a barrel on the New York Mercantile Exchange, after surging above $112 a barrel during Wednesday's session.[12]
"We have been conservative in our inventory planning and expense management and will continue to do so until the environment improves," Montgomery said. Kohl's, which held grand openings of 14 stores today, plans to enter the Miami-Ft. Lauderdale market in the third quarter, part of its goal of 70 to 75 new doors this year. [45] Food costs are high, gasoline prices are at record levels and housing and credit woes continue. Retailers also faced their toughest monthly comparison of the year, said Perkins.[15] Retailers struggled with a collapse of confidence among shoppers, who face mounting financial problems--soaring food and gas prices, limited credit and slumping home prices.[43]
In the UK, Asda's sales were ahead of plan, driven by high traffic and the Easter seaon, with the strongest performances in confectionery, fresh foods, children's wear and video games. [7] An Easter dividend could come next month, when Target said the extra sales day could boost sales in the mid-single digits.[41] Sales were pulled down by sagging interest in men's apparel and lawn and garden, combined with closed doors on Easter.[41] Target said it was hurt, in part, by lower sales in men's apparel and lawn and garden.[38]
Any boost in sales could be temporary, however, as analysts believe many shoppers will use a chunk of the money to pay down debt.[25] J.C. Penney Co. was another big loser, with sales sagging 12.3%, slightly more than expected.[27]
Nordstrom had a 9.1 percent decline in same-store sales; analysts had expected an 8.0 percent drop. [24] Apparel retailers suffered one of the worst declined in years, and sixth monthly decline in a row.[4] Retailers blamed the early arrival of Easter and cold weather for dampening consumers' appetite for spring merchandise, particularly apparel.[19] An earlier Easter holiday combined with chilly weather compounded retailers' woes, eliminating the need for consumers to buy new spring merchandise.[28]
Beyond still-climbing gasoline and diesel prices not helping get folks in a shopping mood, the Easter holiday also resulted in store closures, further skewing comparisons. [26] Daren Barnard, 10, right, pushes a shopping cart full of groceries and other items as he walks with cousins Kiya Barnard, 7, and Chenwrah Barnard, 8, left, outside a Wal-Mart superstore in Turnersville, N.J. Tuesday, March 11, 2008.[19] The rate was the highest since 30-year rates stood at 6.13 percent the week of March 16.[22] Prices have set a string of records in recent weeks, and are 56 cents higher than a year ago.[25] The shares are up nearly 16% year to date. This for a stock that had been stuck in neutral for the last three years, mostly trading between $42 and $51.[30] In the past year it has traded as high as $55. 20 a share and as low as $42. 09.[23]
The company operates 1,050 women's specialty stores, including 608 Chico's front-line stores, 38 Chico's outlet stores, 314 White House/Black Market front-line stores, 19 White House/Black Market outlet stores, 70 Soma Intimates front-line stores and 1 Soma Intimates outlet store. The target customers are women in their 40s for White House/Black Market to early 50s for Chico's, the range which is referred to as "missy" customers in the retail industry. [9] The pricing gap between the two retailers has turned, said Goldman Sachs broadlines retail analyst Adrianne Shapira.[38] Foothill Ranch-based Wet Seal Inc. fell 10.8%, more than the anticipated 7.5%. Although some retailers were feeling more upbeat about April, analyst Jharonne Martis at Thomson Financial said she expected the weak trends to continue, partly because of job losses.[27]
Schoewe didn't detail specific product categories that are growth leaders. Wal-Mart's growth is being led by its core areas, a company spokesman said. They are grocery, entertainment, including flat-screen TV's and video games; health and wellness, featuring a pharmacy program with $4 prescriptions. [38]
SOURCES
1. Business Spectator - US retailer's sales fall in March
2. Bloomberg.com: Worldwide
3. The Associated Press: Stocks Rise Despite Mixed Retail Data
4. Retailers Struggle in March - Market analysis
5. Capture Wal-Marts Success With This ETF | ETF | CLX GIS GPS JCP K MAT WMT WSI - TheStreet.com
6. Wal-Mart Ups Profit Ante Amid Retail Slump (Abercrombie & Fitch Co. (ANF), BJ's Wholesale Club Inc. (BJ), Costco Wholesale Corp. (COST), Gap Inc. (GPS), J.C. Penney Co. Inc. (JCP), Target Corp. (TGT), Wal-Mart Stores Inc. (WMT), (US002896), (US05548J), (US22160K), (US364760), (US708160), (US87612E), (US931142), ) at SmartMoney.com
7. Wal-Mart drives on - news - www.licensing.biz
8. Today's THV - KTHV Little Rock News Article
9. Chico's sales plummet in March | news-press.com | The News-Press
10. Business Briefing - April 11, 2008 -- themorningcall.com
11. Investors find silver lining in data -- OrlandoSentinel.com
12. MyFox Lubbock | Wall Street Open: Stocks Waver After Mixed Retail Data
13. March is another disappointing month for retail sales - Apr. 10, 2008
14. March Same-Store Sales Down Half a Percent
15. Retailers March Same-Store Sales Fell, But Shares Rise On Hopes For The Future
16. New York Post
17. Wal-Mart director expects 'real boost' from tax rebates | APP.com | Asbury Park Press
18. March sadness: Retailers report terrible month :: The Courier News :: Business
19. Drop in Retail Sales Matches Paulson's Dour Predictions - washingtonpost.com
20. AFP: Squeezed by economic woes, Americans spending less
21. Shoppers flock to discounts - - Breaking News, Political News & National Security News - The Washington Times
22. The Modesto Bee | Dollars & Sense
23. NWAnews.com :: Northwest Arkansas' News Source
24. Retailers Have Sluggish March
25. The Associated Press: Retailers Post Sluggish Sales in March
26. 4th UPDATE: March Retail Sales Fall Amid Early Easter
27. Retailers report weakest March in 13 years - Los Angeles Times
28. March Retail Sales: Worse Than We Expected - Advertising Age - News
29. index
30. Wal-Mart returns to darling status on Wall Street : Money & Company : Los Angeles Times
31. Poor consumer confidence shifts spending habits
32. The Columbus Dispatch : Wal-Mart drops push for mega-store in Delaware
33. Closing Glance: Broadline Retailers Up | Chron.com - Houston Chronicle
34. Business 101: Chain-store sales and jobless claims - New Jersey Local & Small Business News ' Economics & Finance News Articles - NJ.com
35. Bharti to unveil retail brand this month: Mittal
36. Bargain shoppers boost Wal-Mart, Costco sales | smh.com.au
37. JS Online: Wintry March sends retail sales down
38. Wal-Mart Gets Boost As Consumers Trade Down
39. Sector Roundup: Discounters, Teen Retail - Forbes.com
40. Target same-store sales slide in March - Minneapolis / St. Paul Business Journal:
41. March madness: Retailers see worst monthly sales in 13 years
42. 21 News Now, More Local News for Youngstown, Ohio - Sales said weakest in over a decade
43. Wal-Mart Embarrasses (Most) Competition - Forbes.com
44. London Free Press - Business - Slowdown a boost for Wal-Mart
45. March leaves most retailers in retreat - 4/10/2008 1:23:00 PM - Home Textiles Today
46. Most retailers lose fight against downturn | Chron.com - Houston Chronicle
47. U.S. stocks gained
48. The Enquirer - Business digest
49. Retailers' Sales Weakest in More than a Decade | KGMB9.com | Sales, Too, Apparel, Frugality, New
GENERATE A MULTI-SOURCE SUMMARY ON THIS SUBJECT:
Please WAIT 10-20 sec for the new window to open...
You might want to EDIT the default search query below:
Get more info on Wal-Mart, Costco Sales Gain as Bargains Lure Shoppers (Update8) by using the iResearch Reporter tool from Power Text Solutions.
 |
|  |
|
