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Retailers post sales gains
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October 7, 1999: 2:44 p.m. ET
Strong September sales without steep markdowns seen boosting profits
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NEW YORK (CNNfn) - Most of the nation's big retailers reported higher sales for September, but J.C. Penney said sales were sluggish in the period.
The sector seems to be moving so far at a fairly even pace, said Michael Exstein, retail analyst at Credit Suisse First Boston. He said department store sales have been strong without the usual heavy discounting, which should be good for profits.
"Retailers are reporting that many of them are having very good initial experience with seasonal merchandise," he said, "which is different than last year at this time."
Exstein said the retail business is very much a two-tiered environment, with some retailers getting their share of the market at the expense of traditional department stores.
"You've got some very aggressive guys out there," he said.
The numbers
On Tuesday, the world's No.1 retailer, Wal-Mart Stores Inc. (WMT), reported comparable-store sales rose 7.2 percent in the five weeks ended Oct. 1. Net sales were $15.7 billion a 26.4 percent increase over the same period last year.
Sears, Roebuck and Co. (S), the No.2 retailer, reported comparable domestic store revenues rose 4.1 percent. Total sales, including other stores, were $2.61 billion. Total
Arthur C. Martinez, chairman and chief executive officer, said September benefited from a strong Labor Day weekend and focused marketing efforts.
Kmart Corp. (KM), the No. 3 retailer in the United States, said comparable store sales increased 4.5 percent. Total sales increased 2.5 percent to $2.99 billion for the five weeks ended Sept. 29 from $2.86 a year earlier.
"September sales were below expectation as the retailing environment became increasingly promotional through the back-to-school season," said Floyd Hall, chairman, president and CEO.
J.C. Penney Co. Inc. (JCP) said comparable-store sales were down 0.1 percent compared with last year. Department store sales for September decreased 0.2 percent to $1.28 billion.
The Plano, Texas-based company said sales for the five weeks ended Oct. 2 increased 8.4 percent to $2.89 billion from $2.66 billion in the comparable 1998 period.
Federated Department Stores Inc. (FD), parent company of Macy's, Bloomingdale's and other chains, saw comparable-store sales rise 3.7 percent. The Cincinnati-based company reported total sales of $1.64 billion, a 15.7 percent increase from the same period last year. James Zimmerman, chairman and CEO, said the company's September sales along the East Coast were hurt were hurt by Hurricane Floyd.
The Gap Inc. (GPS), the clothing chain that also owns the Old Navy and Banana Republic chains, said comparable-store sales were up 7 percent, compared to a 14 percent increase in September 1998.
The San Francisco-based company said total sales including new stores for the five weeks ended Oct. 2 rose 28 percent to $1.19 billion from $874 million a year earlier.
The holiday season - and beyond
Exstein said he expects the upcoming holiday season to be stronger than last year, noting that business came very late in the season in 1998.
"I think we'll have a fairly strong holiday season," he said, pointing to the combination of momentum and people's expectations for the millennium. "However, we may have a hangover in the first half of the year."
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