|
Retail sales a mixed bag
|
 |
September 3, 1998: 2:06 p.m. ET
Later Labor Day weekend took wind out of some store's August' sales
|
NEW YORK (CNNfn) - The nation's leading retailers Thursday churned out a mixed bag of same-store sales for August, with some performing well and others blaming the later Labor Day weekend for taking the wind out of the month's normally inflated sales.
J.C. Penney Co. Inc. (JCP) Thursday said its comparable-store sales slipped 2.4 percent in August, while Federated Department Stores (FD), owner of Bloomingdale's, Macy's and Burdines, reported a 1.7 percent drop.
Total sales for Federated, a $15.6 billion company, fell 3.3 percent to $1.13 billion during the month.
"There were several key factors at play in August," said Federated Chairman and Chief Executive James M. Zimmerman. "First, our strong July sales meant there was less clearance merchandise in the stores in August, which reduced sales volume but helped margins. Second, August was impacted by the shift into July of several division promotional events held in August last year."
He also said the July, August and September sales figures will have to be combined to get a "more accurate sales comparison" for the period.
May Department Stores Co., the nation's seventh-largest retailer, is reporting a marginal 0.7 percent drop in August same-store sales, with total sales for the four-week period registering at $927.2 million - about the same as last year.
May (MAY) attributed its modest sales decline to Labor Day falling one week later than in the last year, delaying the boost in back-to-school sales. The company, though, said September sales will make up for it.
At Sears, Roebuck and Co. (S), the second-largest U.S. retailer, total domestic store sales rose 1.3 percent to $2.25 billion.
"Increases in home appliances and electronics led hardgood sales in our full-line stores, offsetting much of the impact the later Labor Day holiday had on comparable-store sales," Chairman and Chief Executive Arthur Martinez said in a statement. "Top performers included air conditioners, vacuum cleaners, dishwashers and large-screen televisions."
At the same time, sales at specialty retailer Talbots Inc. (TLB) fell 3.7 percent, with total sales climbing 6 percent to $61.1 million.
Analysts, however, said comparing 1998 August store sales to year-ago results is like comparing apples to oranges.
"The August figures this time are basically not very reliable for anything whatsoever," said Kurt Barnard, of Barnard's Retail Trend Report. "A lot of the Labor Day activity will come in September this year."
Recent stock-market volatility aside, Barnard said he has predicted a gradual slowdown in consumer spending momentum for months.
He further predicted that spending for the second half of the year and for the Christmas season will remain relatively strong, that is if the stock market holds its own.
A heavy promotional climate should prevail among retailers.
Not all retailers, however, suffered a sales decline in August.
Kmart (KM) Thursday reported same-store sales for August rose 4.8 percent.
Specialty clothing retailer The Gap Inc. (GPs) also saw its sales rise 9 percent
Dayton Hudson Corp., (DH) the fifth-largest U.S. retailer and owner of Target discount stores, said its same-store sales in August rose 3.3 percent from a year earlier, while total sales rose 8.4 percent to $2.3 billion from $2.1 billion a year ago.
And Wal-Mart Stores Inc. (WMT), the nation's top retailer, said Thursday that same-store sales for the four weeks ended Aug. 28 increased 7.6 percent from a year earlier, while net sales surged 16 percent to $10.26 billion from $8.83 billion.
"Sales in August were essentially on plan at Target and the Department Stores, and below expectations at Mervyn's," Bob Ulrich, chairman and chief executive officer of Dayton Hudson, said in a statement.
According to Asma Usmani, a retail analyst with Edward Jones, most discount stores should post solid gains for the remainder of the year.
"High-end retailers have seen a steep decline because there is concern that consumers will slow down their spending, that there won't be as much frivolous spending," she said. "If we do start to see a slow down in the economy, it'll be the high-end retailers that will be impacted first."
Usmani is recommending the stock of Wal-Mart and Dollar General (DG), both of which have enjoyed steady gains.
Luxury retailer Saks Holdings Inc. (SKS) Thursday also reported a 7.1 percent jump in August same-store sales, while total sales climbed 11 percent to $154.1 million.
Barnard said that retail stocks are still a safe bet for the remainder of the year as risk-averse investors begin funneling their money into steadier stocks.
"I believe the retail stocks are going to do well," he said. "Overall, my outlook at the present time, provided the stock market doesn't cave in completely, is for a decent second half of this year with decelerated shopping momentum." 
|
|
|
|
|
|
Kmart
Sears
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
