Retailers' sales mixed
Discount chains pull in higher sales; department, apparel shops head lower.
March 7, 2002: 4:11 p.m. ET
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NEW YORK (CNN/Money) - Shoppers deepened their infatuation with discount chains last month, company sales reports showed Thursday, lured by lower prices in a down economy. That trend handed Wal-Mart and Target a sales boost in February but pinched the likes of Federated Department Stores and Gap.
With everyday low prices, discount and off-price retailers have steadily nabbed market share from more traditional department stores and specialty shops over the past several years. That shift became more pronounced when the economy began to ebb in 2000 and accelerated after the Sept. 11 terrorist attacks.
February proved no different, with sales led by spring clothing and merchandise, thanks mainly to unseasonably warm weather during the month, analysts said, and consumers remained surprisingly resilient during the economic downturn.
"It looks like the off-mall numbers look really good, and the mall-based numbers still look to be tough out there," Midwest Research retail analyst Jeff Stinson said. "To say this is a trend we've seen over the last year is selling it short. It's been a trend we've seen for quite some time. The off-price guys offer better prices to consumers."
Wal-Mart Stores Inc. (WMT: up $0.80 to $61.70, Research, Estimates), the world's largest retailer, saw overall sales jump 15.6 percent to $17.2 billion in the four weeks ended March 1.
Sales at stores open at least a year, a closely-watched retail measure known as same-store sales, rose 10.3 percent, more than double the gain in the year-earlier period and easily outpacing the company's own guidance for a 6 to 8 percent increase in the month.
Another discount retailer, Target Corp. (TGT: up $1.27 to $43.49, Research, Estimates), said February same-store sales jumped 8.5 percent from a year earlier, including results from its more sluggish Mervyn's and Marshall Field's department store divisions. Same-store sales at Target stores alone jumped 10 percent from a year ago, the company said.
Off-price operator TJX Cos. (TJX: up $2.23 to $39.78, Research, Estimates) said that February same-store sales jumped 7 percent from a year earlier.
Meanwhile, Federated (FD: up $0.67 to $43.37, Research, Estimates), owner of Macy's, Bloomingdales and other chains, said same-store sales dropped 2.8 percent, which it said was in line with its expectations for the period. Overall sales fell 2.9 percent to $1.05 billion.
May Department Stores (MAY: up $0.25 to $37.24, Research, Estimates), owner of the Lord & Taylor, Hecht's, David's Bridal and other stores, reported a 2.7 percent decline in same-store sales.
And Sears (S: Research, Estimates), the nation's No. 2 retailer, saw domestic same-store sales fall 3.1 percent, while overall U.S. sales declined 1.2 percent to $1.9 billion. A sharp drop in clothing sales more than offset gains in electronics and appliance sales, the retailer said.
Dillard's sales fell 5 percent at its department stores last month while Saks Inc., operator of Saks Fifth Avenue stores, said same-store sales fell 2.6 percent.
However, J.C. Penney Corp. (JCP: up $2.08 to $21.27, Research, Estimates) is one traditional department store that surprised the Street and investors Thursday with a whopping 12.5 percent jump in February same-store sales at its department stores. The company, which has been in the midst of a turnaround effort under CEO Allen Questrom, said the month's results were significantly better than its plans for the division.
The company said strong apparel sales drove its monthly sales number higher.
Same-store sales at the company's Eckerd drugstore division rose more than 6 percent. But catalog sales tumbled in the period.
Specialty shops also struggled in the month, with troubled Gap Inc. (GPS: up $0.33 to $13.51, Research, Estimates), the nation's largest apparel chain, saying same-store sales tumbled 17 percent. Sales at Gap domestic operations led the declines, plunging 24 percent compared with a 6 percent decline a year earlier. The company's Gap International, Old Navy and Banana Republic divisions also posted double-digit sales declines.
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Limited Inc. (LTD: down $0.22 to $17.71, Research, Estimates), which is buying the remaining stake of Victoria's Secret parent Intimate Brands that it does not already own, posted a 2 percent same-store sales increase in February.
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