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Wal-Mart, Penney sales up
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September 6, 2001: 2:20 p.m. ET
Wal-Mart, Penney same-store sales post gains; apparel retailers sales fall
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NEW YORK (CNNfn) - Wal-Mart Stores Inc., the world's largest retailer, and troubled department store chain J.C. Penney Co. Thursday reported strong gains in sales in August, bucking reports from other chains.
Wal-Mart (WMT: down $1.72 to $47.43, Research, Estimates) said sales at stores open at least a year, a closely watched measure known as same-store sales, jumped 7 percent in the four weeks ended Aug. 31. That's better than the 5.8 percent gain in same-store sales it reported in August 2000. Overall sales increased 14.3 percent to $16.5 billion.
"Basically the economy is sluggish," Bear Stearns specialty retail analyst Dana Telsey told CNNfn's The Money Gang. "We are seeing consumers resisting spending and the outlook for the second half of the year is not as bright as it had been. Even Wal-Mart said its second half will not be as strong."
J.C. Penney (JCP: down $0.02 to $24.26, Research, Estimates), which has been restructuring, said same-store sales at its department stores rose 7.5 percent, which it said was well above its own forecasts. The Eckerd drugstore chain had an 8 percent rise at stores open at least a year, but catalog sales fell 11.5 percent, limiting the overall sales gain at the company to 4.4 percent.
Other chains reported much weaker sales results. Federated Department Stores Inc. (FD: down $2.37 to $33.28, Research, Estimates), which owns the Macy's and Bloomingdale's chains, posted a 2.9 percent drop in same-store sales while total sales fell 5.5 percent due to cuts at its Fingerhut's catalog and online unit and the closing of the Stern's chain.
Kmart Corp. (KM: down $0.53 to $9.45, Research, Estimates), the nation's No. 3 retailer behind Wal-Mart and Sears Roebuck & Co. (S: down $1.64 to $41.31, Research, Estimates), reported same-store sales rose just 0.2 percent last month, as results were hurt by clearance sales. Without that action the company said same-store sales would have been up 2.3 percent. Total sales fell 2.6 percent to $2.6 billion.
Target Corp. (TGT: down $1.93 to $33.05, Research, Estimates), which operates the Target, Mervyn's and Marshall Field's chains, saw a 2.4 percent increase in same-store sales, in line with its internal plans. The Target stores saw same-store sales gain 3.9 percent, while Mervyn's and Marshall Field's lost ground on that measure.
Overall sales at the Minneapolis-based company, which is poised to pass Kmart to become the nation's No. 3 retailer this year, gained 9.8 percent to $3.0 billion for the month.
Among specialty retailers, Gap Inc. (GPS: down $4.05 to $14.95, Research, Estimates) saw sales far below its own expectations, as same-store sales fell 17 percent in the month as all four chains it operated lost ground.
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New store openings kept overall sales at Gap flat for the month, but the company said that third quarter same-store sales would fall more than it previously projected. It also said profit margins are weaker than expected. But the company did not give specific earnings figures or forecasts.
"Gap's basic and fashion merchandise is certainly not getting the right mix in order to sell more goods at full price," said Bear Stearns' Telsey.
Gap wasn't the only apparel retailer to see lower same-store sales. Limited Inc. (LTD: down $0.62 to $13.02, Research, Estimates), Talbots Inc. (TLB: down $2.15 to $34.85, Research, Estimates) and AnnTaylor Stores Corp. (ANN: down $0.80 to $32.21, Research, Estimates) all reported declines.
Best Buy Co. (BBY: up $1.08 to $59.80, Research, Estimates) reported better than expected sales, though, and said it will exceed analysts' earnings forecasts for its second quarter.
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The electronics retailer did not report separate August sales data, but said it saw a 2.8 percent gain in same-store sales for the quarter ended Sept. 1, and that it is looking at profits of 38 cents a share in the period. Analysts forecast the company will earn 30 cents a share, down from 36 cents a share a year earlier, according to First Call.
"Hard electronic retailers, like Best Buy, are seeing more of the tax refund dollars than specialty retailers," said Telsey.
No. 2 retailer Sears Roebuck & Co. (S: down $1.64 to $41.31, Research, Estimates) Wednesday reported only a 0.2 percent increase in same-store sales for August.
TeleCheck, a service that clears checks for many retailers, said same-store sales rose 3 percent industrywide in August. 
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