Posted on 08/07/2003 7:27:11 AM PDT by kattracks
NEW YORK, Aug 07, 2003 (AP Online via COMTEX) -- Retailers finally got a break in July as warm weather and heavy discounting helped lift sales above expectations for many merchants, even the struggling department store sector.
As retailers reported their sales results Thursday, all industry segments appeared to benefit from an improved selling environment. Wal-Mart Stores Inc., the industry leader, boosted its profit outlook for the second quarter.
J.C. Penney Co. Inc., Kohl's Corp. and Gap Inc. were among the retailers reporting sales that beat analysts' forecasts.
Even May Department Stores Co., which has struggled with sales declines, eked out a solid increase in sales at stores open at least a year, surpassing analysts' forecasts. Sales at stores open at least a year, known as same-store sales, are considered the best indicator of a retailer's health.
"It was a good month, and it may be a good omen for the second half," said Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd. "Sure, the month was promotional and weather helped, but this could be the start of a much better trend."
Bank of Tokyo-Mitsubishi's same-store sales tally of 77 retailers was up 4.3 percent, well above the 3 percent gain Niemira had expected. That compares to a 2.6 percent increase in the year-ago period.
The pace is well above the sluggish 1.5 percent increase that had been seen from last August through April, although the last two months, same-store sales improved slightly, averaging a 2.2 percent gain.
July - when retailers step up discounting to clear out summer merchandise and make room for fall goods- is one of the least important months in a retail sales calendar. Analysts are now closely monitoring August and September, which account for the critical back to school season.
Wal-Mart, which along with other retailers struggled with cooler than normal temperatures in May and June, said same-store sales were up 4.6 percent, well past the 3.7 percent increase predicted by analysts surveyed by Thomson First Call.
Wal-Mart's total sales were up 11.9 percent, driven by food, electronics, swimwear and pet supplies.
The discounter now expects earnings from continuing operations for the second quarter, ended July 31 to be around 52 cents per share. Analysts surveyed by Thomson First Call expected 50 cents per share. The retailer is slated to report earnings results on Wednesday.
Kohl's, which had seen sales slow over the last few months, had a big improvement in July. Same-store sales increased 6.7 percent, far beating analysts' expectations of 1.6 percent. Total sales increased 21.4 percent.
Penney said same-store sales were up 3.7 percent for its department store business, beating Wall Street's projections of a 1.0 percent gain. Total sales were up 3.4 percent.
May said its same-store sales rose 1.8 percent, while its total sales were up 4.5 percent. Analysts had expected a same-store sales decrease of 2.5 percent.
Federated Department Stores Inc., which operates such stores as Bloomingdale's and Macy's, did not fare as well, reporting same-store sales that decreased 0.4 percent. Total sales slipped 0.5 percent.
Still, Federated's same-store results beat analysts' projections for a 1.1 percent decline. And the company, buoyed by leaner inventory and improved sales, increased its earnings forecast to 60 cents to 63 cents, for the second quarter, up from its prior outlook of 50 cents to 55 cents. Analysts had expected 54 cents per share.
Gap, continuing its turnaround, reported same-store sales increase of 9 percent, better than the 8.1 percent gain that Wall Street anticipated. Total sales were up 12 percent.
The company said back-to-school sales should benefit from the fall ad campaign starring Madonna and rap star Missy Elliott.
Selected sales for July for other leading retailers:
-Abercrombie & Fitch, same-store sales were down 11 percent; total sales were up 6 percent.
-AnnTaylor Stores Corp., same-store sales were up 7.6 percent; total sales were up 15.7 percent.
-Sears, Roebuck and Co., same-store domestic sales slipped 0.8 percent; total sales decreased 0.3 percent
-Target Corp., same-store sales increased 3.1 percent; total sales were up 10.9 percent.
By ANNE D'INNOCENZIO AP Business Writer
Damn it!
Where's the damn recession the Dems were counting on. What the heck is going on here? We will have to start a "save the endangered Daschle" fund soon.
Michael
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