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Retailers ring up high sales
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May 4, 2000: 3:49 p.m. ET
Retailers show gains in April, but Kmart will miss 1Q estimates on weak sales
By Staff Writer Chris Isidore
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NEW YORK (CNNfn) - April showers, and cold weather, were not enough to stop most major retailers from posting strong sales gains last month - although two major retailers, Kmart Corp. and Gap Inc., warned that weak sales in the period would cut expected fiscal first-quarter profits.
The late Easter helped some top retailers - such as Wal-Mart Stores Inc. and Target Corp. - along with some major specialty retailers to post double-digit gains in sales at stores open at least a year. That closely-watched measure, known as same-store sales, is a key measure of retail strength. The results topped expectations of many analysts.
 "Comparison would have been even better for some of those retailers if you would have had better weather in the Northeast," said Dana Telsey, retail analyst for Bear Stearns, in an interview on CNNfn Thursday morning. (327KB WAV) (327KB AIFF)
TeleCheck Services Inc., which clears checks for retailers, estimates that overall same-store sales gained 4.6 percent in the month, with the growth spread relatively evenly across all regions of the country.
TeleCheck looks at calendar month results, though, rather than the four-week period used by major retailers, so its results were helped by a fifth weekend in the month, as well as the late Easter holiday.
Kmart sales, profit drop despite industry strength
Kmart (KM: Research, Estimates), the nation's third-largest retailer after Wal-Mart and Sears Roebuck & Co., saw a 0.8 percent drop in sales of stores open at least a year during the four-week period ended April 26. Overall sales gained 0.8 percent to $2.8 billion for the period.
 For the company's fiscal first quarter, same-store sales were flat, while overall sales rose 1.5 percent to $8.1 billion. But that was not enough to allow it to meet estimates.
Kmart said earnings would fall to about 5 cents a share for the three-month period ended April 30, from the 11 cents it posted a year earlier. Analysts surveyed by earnings tracker First Call had expected only a slight drop in earnings, forecasting the company would earn 10 cents a share in the quarter.
The company said it is increasing promotions and expects to meet financial plans for the full fiscal year. Analysts forecast it to earn $1.30 a share in fiscal 2001.
Shares of Kmart lost 7/8, or 10.6 percent, to 7-3/8 in midday trading Thursday.
Weak pre-Easter shopping causes earnings Gap
Gap Inc. (GPS: Research, Estimates), the nation's leading apparel retailer, will likely miss earnings forecasts for the period by one to two cents a share due to slow pre-Easter sales, although it posted much stronger gains than Kmart in April.
The San Francisco-based company saw same-store sales rise 7 percent in the four-week period, with the best strength in its domestic Gap stores and its Banana Republic chain. But its same store sales slipped 2 percent for the first fiscal quarter.
 Thursday's warning was not included in the company release, but was given by Heidi Kunz, the company's chief financial officer, in a recorded conference call.
"While Easter holidays typically drive strong sales over the three weeks leading up to Easter, we experienced only one week of strength, week three, this year," she said.
Analysts surveyed by First Call forecast that the company earned 28 cents a share in the quarter ended April 29, up from 22 cents a share in the year earlier period.
Overall sales at Gap (GPS: Research, Estimates) gained 31 percent to $966 million in the four-week period, and climbed 20 percent to $2.7 billion, in the fiscal quarter.
Gap shares lost 2-1/8 to 34-58 Thursday.
Wal-Mart, other retailers see strength
Wal-Mart Stores Inc., the nation's largest retailer, saw a 10.9 percent gain in same-store sales. For the fiscal first quarter, same-store sales posted a 4.9 percent gain.
 The company's core Wal-Mart stores division saw even better gains, with same-store sales rising 11.6 percent in the month and 5.0 percent for the quarter. Its discount/wholesale Sam's Club division saw same-store sales rise 8.3 percent in the month and 3.1 percent in the quarter.
Overall, the Bentonville, Ark.-based retailer posted a 28.4 percent gain in sales in the four-week period to $14.1 billion, and a 23.6 percent gain in the quarter to $44.0 billion.
Despite the strong report shares of Dow component Wal-Mart (WMT: Research, Estimates) fell 1-11/16 to 51-3/4 in trading Thursday.
Weather hits Sears apparel, home & garden sales
Sears saw domestic same-store sales rise 2.4 percent in the four-week period and 3.0 percent for the fiscal quarter, while total worldwide sales increased 3.7 percent to $3.0 billion in the month and 4.1 percent for the quarter to $9.3 billion.
It said it saw strength in home electronics, footwear and infants, toddler's and children's apparel during April, although cooler weather hurt overall apparel sales as well as home and garden sales.
Shares of Sears (S: Research, Estimates) were unchanged at 36-7/16 in trading Thursday.
Target shows double-digit gains
Target Corp., the nation's fourth-largest retailer, posted an 11.1 percent gain in same-store sales in April. It also attributed the gain to the late Easter, as it saw only a 3.0 percent rise in same-store sales in the fiscal quarter.
Its core Target stores division saw even better 14.7 percent rise in same-store sales in the month and 4.7 percent increase in that measure for the quarter. But same-store sales slipped in its department stores division and its Mervyn's stores chain.
Overall, the Minneapolis-based retailer, which used to be known as Dayton Hudson Corp., saw total sales rise 17.0 percent in April to $2.5 billion, and 8.2 percent for the quarter to $7.6 billion.
Shares of Target (TGT: Research, Estimates) were also unchanged 63-3/4 in early trading Thursday.
Penney results show rebound from problems
J.C. Penney Co. (JCP: Research, Estimates), which has lagged behind other retailers in recent periods, rebounded in from its problems somewhat in April.
The company, which lost its fifth-place ranking to Target last year, saw a 3.4 percent gain in same-store sales at its department stores in the month, although the earlier problems caused it to suffer a 3.1 percent same-store sales decline for the quarter in that division.
Total sales, including its Eckerd drug stores division and catalog sales, rose 4.7 percent in the month to $2.5 billion, and 2.6 percent for the quarter to $7.7 billion.
Separately, the company said its chairman and chief executive was retiring and the retailer has begun a search for his successor.
Shares of Penney stock rose 7/16 to 16-5/16 in trading Thursday.
Federated posts disappointing results
Federated Department Stores Inc., which operates leading chains such as Macy's, Bloomingdale's and Lazarus, saw same-store sales rise 5.2 percent in April, but only 2.9 percent for the fiscal quarter.
James Zimmerman, the chairman and chief executive of Federated (FD: Research, Estimates), said the company is satisfied with overall results for the quarter, but is disappointed with April sales. Overall sales for the nation's sixth largest retailer grew 6.6 percent in the month and 12 percent for the quarter. The sales, especially of apparel, picked up as weather improved at the end of April, he said.
Shares of Federated gained 7/32 to 34-5/16 in trading Thursday.
RadioShack keeps Tandy sales on track
Tandy Corp. reported a 7 percent increase in comparable store sales for April, reflecting continued strong sales at its RadioShack division. But shares of Tandy (TAN: Research, Estimates), which recently changed its name to RadioShack, fell 6-9/16 to 49-7/16 on the New York Stock Exchange Thursday.
Total sales from both company-owned stores and dealer/franchise stores increased 13 percent to $327.6 million from $288.8 million in the same period a year ago.
RadioShack's year-to-date sales totaled $1.3 million compared with $1.2 million a year ago, an increase of 15 percent. Year-to-date comparable store sales rose 11 percent.
Strength in upscale and specialty retailers
Many of the leading specialty and apparel retailers also posted strong gains, with upscale retailers, electronics and home items showing particular strength.
Neiman Marcus Group Inc. (NMG: Research, Estimates), which includes both Neiman Marcus stores and Bergdorf Goodman, saw an 11.8 percent gain in same-store sales in the four-week period. It did not release results for the quarter, but for the 39-weeks ending April 29 same-store sales gained 11.5 percent.
Overall sales rose 12.2 percent to $231.4 million for the four-week period and 13.9 percent to $2.3 billion for the 39-week period.
Shares of the upscale retailer's class A stock gained 1 to 25-1/2, while its less traded B-stock rose 3/8 to 25-7/16 in trading Thursday.
Apparel retailer The Limited Inc. (LTD: Research, Estimates) saw same-store sales gain 14 percent for the four-week period and 8 percent for the fiscal first quarter, as overall sales climbed to $668.7 million for the month and $2.1 billion for the quarter, a rise of 13 percent in the month and 8 percent for the quarter when adjusting for two divisions that were spun-off since the year-earlier period.
Limited shares gained 3/8 to 44-7/8 in trading Thursday.
Electronics retailer Circuit City Group (CC: Research, Estimates) reported strong sales for its electronics unit, led by strong home office equipment sales. Same store sales rose 14 percent in the calendar month of April, which the company uses rather than the industry's standard four-week period. While the Easter holiday had only marginal impact on sales, the extra weekend did help comparisons.
The company did not release results for the three-month period. Overall sales rose 20 percent to $983.9 million.
Shares of Circuit City Group lost 3 to 55-5/16 in trading Thursday. 
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