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Retailers post strong sales
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March 2, 2000: 9:16 a.m. ET
February same-store sales gained 4.8% overall; Wal-Mart tops average
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NEW YORK (CNNfn) - Retail sales posted solid gains in February, a further sign of the strength of consumer spending nationwide.
Sales climbed 4.8 percent last month for stores open at least a year, a measure known as same-store sales, according to TeleCheck Services Inc. Although the leap year increased the length of the month by 3.6 percent, most company reports are not affected by the leap year as they calculate the change for a fixed four-week period.
Same-store sales are a key measure of the strength of consumer spending, which drives about two-thirds of the nation's economy. The reports from retailers show there is no sign of weakening in the strong retail economy.
"February sales were very strong, stronger than anticipated in many instances," said Kurt Barnard, president of Barnard's Retail Trend Report. "I will tell you that if you were a retailer in February and did not do very well, you stood out like a sore thumb. We're telling our clients that the first half of this year will continue to be marked by continued strong spending at the retail cash register."
Retail leader Wal-Mart beats industry gain
The nation's leading retailer, Wal-Mart Stores Inc. (WMT: Research, Estimates), had even stronger gains than that, although the improvement was lower than a year ago.
The company's Wal-Mart unit's sales rose 6.5 percent on a same-store basis compared with a 10.8 percent improvement a year earlier. The Sam's Club wholesale club division had a 4.4 percent improvement, compared with 8.1 percent in February 1999. Overall, the company had a 6.1 percent improvement for the month, compared with 10.3 percent a year earlier. Total sales rose 23 percent to $13.2 billion.
Most of the major retailer's stocks rose in morning trading Thursday. Dow component Wal-Mart was among the best performers, gaining 2-1/8, or 4.3 percent, to 51-1/8. Also, the company's stock was upgraded Thursday by Morgan Stanley Dean Witter.
Aside from its strong sales, the company announced late Wednesday that it hired Jeanne Jackson, one of the most prominent figures in online retailing, as the new chief executive of Walmart.com.
Sears Roebuck & Co. (S: Research, Estimates), the second largest U.S. retailer, saw its same-store sales in the United States gain 3.1 percent during the month, as sales of home office, home appliance and sporting goods products were particularly strong. Overall domestic sales rose 4.4 percent to $2 billion, while worldwide sales gained 2.4 percent to $2.7 billion.
Kmart Corp. (KM: Research, Estimates) same-store gains lagged the industry-wide number as well as its own plans. The Troy, Mich., retailer, the third largest in the United States, said same-store sales rose 2.7 percent and overall sales gained 4.0 percent to $2.4 billion for the period.
Kmart was one of the few retail stocks losing ground in morning trading Thursday, slipping 1/8 to 8-9/16.
J.C. Penney one of few to loose ground
J.C. Penney Co. (JCP: Research, Estimates), the fifth largest U.S. retailer, saw same-store sales at its department stores fall 2.4 percent in February, bucking the trend. The division's overall sales declined 2.2 percent to $891 million.
In an interview on CNNfn's Before Hours program, Joe Grillo, retail analyst with Deutsche Banc Alex. Brown said the drop is not surprising, but it does show the depth of the problem at the troubled chain, which recently announced plans to close about 45 department stores this year.
"It's actually reasonably in line with their expectations, but indeed it is still disappointing long term," he said. (100KB WAV) (100KB AIFF)
But Penney's Eckerd drugstores division had a 4.7 percent improvement in same-store sales and a 14.2 percent overall gain to $1 billion to pass the department store revenue. Catalog sales rose 3.9 percent to $291 million, and overall company sales gained 5.7 percent to $2.3 billion.
Shares of Penney fell 3/16 to 15-5/16 in trading Thursday morning.
Federated Department Stores Inc. (FD: Research, Estimates) posted a strong same-store sales gain of 5.3 percent in the period, even stronger than its overall sales gain. The Cincinnati-based owner of such department store chains as Macy's and Bloomingdale's, saw department store sales improve 4.9 percent to $1.1 billion, but total sales grew 18.3 percent due to the addition of direct-to-customer retailer Fingerhut in March.
May Department Stores Co. (MAY: Research, Estimates) posted a 3.6 percent gain in same-store sales and a 7.6 percent overall gain to $913.2 million for the four-week period.
Dillard's Inc. (DDS: Research, Estimates), the Little Rock, Ark-based retailer which is one of the few expected to report reduced earnings for the holiday period, saw flat same-store sales for the month, and a 1 percent increase in overall sales to $634.5 million for the period.
Higher-end retailers post better gains
Some of the higher-end retailers reported even stronger gains in same-store sales. Specialty women's apparel retailer Talbots Inc. (TLB: Research, Estimates) saw same-store sales increase 20.4 percent, helped by the launch of a print and television advertising campaign. Overall sales at the company gained 23 percent to $74.6 million. Talbots shares were among the best performers in the sector, rising 1-5/8, or 4.7 percent, to 36-1/2 in Thursday morning trading.
Neiman-Marcus Group Inc. (NMG.A: Research, Estimates) was another high-end retailer with a double-digit gain in same-store sales, rising 11.2 percent to $189.8 million. Overall sales for the Chestnut Hill, Mass-based retailer rose 14 percent to $195.1 million.
Seattle-based Nordstrom Inc. (JWN: Research, Estimates) saw same-store sales in February rise 5.9 percent, but that is a calendar month rather than a four-week comparison affected by the leap year. Excluding the impact of the extra day, same-store sales rose 3.0 percent, and overall sales rose 8.0 percent. The company's February sales came to $329.5 million.
The one major retailer not reporting same-store sales Thursday was Target Corp. (TGT: Research, Estimates), the fourth largest U.S. retailer, which released its results on Tuesday for the four-week period ending Feb. 26. Its same-store sales gained 3.8 percent, essentially matching the company's plan for the period, while overall sales rose 8.7 percent to $2.2 billion.
Toy and closeout retailer Consolidated Stores Corp. (CNS: Research, Estimates) saw improved same-store sales in both divisions in February.
Its KBToys division's same-store sales rose 3.4 percent, up from a 1 percent gain a year earlier. Its closeout division had a 9.0 percent improvement in same-store sales, almost twice the 4.6 percent improvement of February 1999. Overall, the company's same-store sales rose 7.2 percent and overall sales grew 13 percent to $294.6 million. 
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