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News > Companies
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Chain store sales rise
Wal-Mart posts 7.9% jump in June as discounters' gains continue to outpace traditional retailers.
July 12, 2002: 7:47 AM EDT
By John Chartier, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Discounters posted much stronger sales in June than their department store rivals, store chains reported Thursday, as the trend of discount-savvy consumers snapping up bargains showed no sign of letting up.

"Discounters have captured the world," said Kurt Barnard, president of Barnard's Retail Consulting Group. "They [discounters] all did very, very well, but it also underscores once again that it is chic to hunt for bargains and it is chic to save, and that is what the American public wants today, and probably wants forever."

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Collectively, retailers posted a 5.1 percent increase in June sales at stores open at least a year, a key gauge known as same-store sales, according to the Bank of Tokyo-Mitsubishi, which bases its figures on the results of 82 retailers.

Apparel chains posted a 0.1 percent sales increase, the first since April 2001, according to BTM, but the category still performed dismally below others such as home goods and seasonal items.

And consumers, whose spending makes up two-thirds of the U.S. economy, are continuing to spend, which should be good news when retailers report their earnings over the next several weeks. Currently, analysts expect a 24 percent increase in profits from a year ago for companies on the Dow Jones retail index, according to earnings tracker First Call. Full-year earnings are expected to rise 26 percent.

But the individual sales results make it clear that Americans have been well trained to hunt for bargains, Barnard said.

Wal-Mart Stores Inc. (WMT: up $0.42 to $54.18, Research, Estimates) reported a 7.9 percent jump in June sales at stores open at least a year, prompting the world's biggest retailer to raise its earnings guidance for the second quarter and full year.

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Discounters have captured the world...(savings)is what the American public wants today, and probably wants forever."
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Kurt Barnard
Barnard's Retail Consulting Group

For the fiscal quarter ending July 31, Wal-Mart expects earnings of 44 or 45 cents a share, up from earlier guidance of 43 or 44 cents, and full-year profit of $1.76 to $1.78 a share, up from previous guidance of $1.74 to $1.76. Analysts polled by earnings tracker First Call forecast 44 cents for the quarter and $1.78 a share for the year.

Another discount chain operator, Target Stores Inc (TGT: up $0.07 to $36.90, Research, Estimates), said June same-store sales increased 4.9 percent from a year ago. The Minneapolis-based company said the results were above expectations thanks to the performance at its core discount stores. Target also operates the Marshall Field's and Mervyn's department store chains, both of which posted same-store sales declines last month.

Costco Wholesale Corp. (COST: up $1.15 to $37.36, Research, Estimates) posted a 6 percent same-store sales increase while TJX Cos. (TJX: down $0.01 to $19.77, Research, Estimates), reported a 3 percent increase from a year earlier.

Kohl's Corp. (KSS: down $0.85 to $69.20, Research, Estimates) posted a whopping 14.8 percent jump in its June sales. The Menomonee Falls, Wis.-based chain has been consistently reporting strong sales numbers, thanks to its efficient operations and planned promotions, analysts have said.

Separately, J.C. Penney Inc. (JCP: down $0.54 to $18.60, Research, Estimates) said its June same-store sales declined 0.3 percent while sales at its Eckerd drugstore division increased 6.2 percent, led by a jump in pharmacy sales. Catalog sales declined 21.7 percent, which was below the company's expectations.

The Plano, Texas-based chain said it expects second-quarter results to come in at the higher end of its anticipated operating loss of 10 to 15 cents a share. The company also reiterated its full-year earnings guidance of 90 cents to $1 a share.

Cincinnati-based Federated Department Stores Inc. (FD: up $0.67 to $38.42, Research, Estimates), the operator of Macy's, Bloomingdale's and other chains, said its same-store sales fell 0.4 percent for the month, which was in line with the company's expectations.

Sears Roebuck & Co. (S: down $1.53 to $48.40, Research, Estimates) reported a 3.8 percent drop in its same-store sales last month as the company continues with a restructuring effort and integrates catalog retailer Lands' End Inc., which it acquired in May.

"While revenues are lower, we continue to be pleased with the progress we are making on our repositioning and restructuring initiatives," CEO Alan Lacy said in a statement. "In particular, our focus on gross margins and productivity improvements continue to contribute to improved profitability."

And May Department Stores Inc., (MAY: up $0.37 to $31.55, Research, Estimates) operator of the Lord & Taylor, Filene's and David's Bridal chains, reported a 1.4 percent drop in same-store sales for June.

Dillard's Inc. (DDS: down $0.06 to $25.86, Research, Estimates), which has been struggling to improve sales, said same-store sales increased 2 percent last month.

Gap Inc. (GPS: down $0.69 to $13.94, Research, Estimates) the nation's biggest apparel retailer, reported a 6 percent same-store sales drop for June, which was an improvement from a year earlier and better than company expectations.

The San Francisco-based operator of Gap, Old Navy and Banana Republic stores has been grappling with tumbling sales amid a series of fashion missteps and a sluggish economy.

Meanwhile Barnes & Noble Inc., (BKS: down $0.75 to $23.00, Research, Estimates) the nation's biggest book retailer, reported a 0.6 percent rise in same-store sales for June. The company, which also operates the B. Dalton chain, said second-quarter earnings guidance remains unchanged as cost-cutting helped offset sales shortfalls.

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Women's apparel chains struggled last month. AnnTaylor Stores Inc. (ANN: down $0.55 to $25.45, Research, Estimates) reported a 1.2 percent drop in same-store sales and Talbots Inc. (TLB: unchanged at $34.20, Research, Estimates) an 8.7 percent decline. However, both companies gave upbeat outlooks, with AnnTaylor saying it expects higher second-quarter earnings than previously forecast and Talbots saying it remains comfortable with Wall Street estimates, which are a penny higher than the company's own previous guidance.

Limited Brands (LTD: down $0.34 to $19.51, Research, Estimates), which operates the Limited stores, Victoria's Secret and other chains, reported a 5 percent increase in same-store sales.  Top of page






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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.