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Quarterly Results Vary for Retailers

NEW YORK - The most recent set of quarterly financial reports from retailers brought mixed news about consumer sentiment.
     Home was a star at some chains and continued to pose problems for others.

Belk Department Stores

CHARLOTTE, N.C. - Ecommerce as well as home are among the most rapidly growing business segments for Southeastern regional department store chain Belk Inc., which saw its net income more than double during the second quarter.
     • Net income up 101.6 % to $25.0 million.
     • Sales up 5.6% to $831.8 million.
     • Comps up 5.2%.

Big Lots

COLUMBUS, OHIO - Home was among Big Lots' most improved merchandise categories during its second quarter, even though it comped down against a double-digit positive same-store sales increase last year.
     The retailer is also focused on absorbing its new Canadian - formerly Liquidation World - which Big Lots acquired on July 18.
     At the top of the list, said cfo Joe Cooper, is merchandise. "We need to fill shelves with great quality and extreme value merchandise. Today, inventory levels are down over 70% or so compared to prior year levels. Lots of empty shelves and a fair amount of inventory that is in stores in aged, and we're moving swiftly to liquidate."
     • Net income down 8.2% to $35.7 million, or 50 cents per share.
     • Sales up 2.2% to $1.17 billion.
     • Comps down 1.5%.

Cost Plus

OAKLAND, CALIF. - The home business segment delivered same-store sales increases during the second quarter at Cost Plus Inc. despite shoppers' cautious approach to discretionary purchases.
     The home textiles category was singled out as among the more resilient non-consumble areas for the retailer. The mix between consumables and home as a percentage of net sales was 65% and 35%, respectively, for the second quarter of 2011 versus 66% and 34%, respectively, for the second quarter of 2010.
     • Net loss widened to $8 million from a net loss of $7 million.
     • Sales up 3.2% to $197.9 million.
     • Comps up 2.8.

Dollar General

GOODLETTSVILLE, TENN. - As consumables drive sales, the home department is among the discretionary areas loosing space during the second quarter.
     "Basically, it is all sku rationalization," said ceo and chairman Richard Dreiling. "As we looked at home, we've made changes in other areas that have affected the business piece by piece, and we've started eliminating unproductive skus. And that is what we did in [home] in the [second] quarter."
     Dreiling did not specify which home goods have been pared back.
     • Net income up 3.5% to $146 million, or 42 cents per share.
     • Sales up 11.2% to $3.58 billion.
     • Comps up 5.9%,.

Fred's

MEMPHIS, TENN. - Same-store sales in home during the second quarter declined in the mid-single-digit range at Fred's, making it the retailer's hardest-hit category.
     "The challenging economic conditions coupled with low consumer confidence during the debt crisis took its toll on our customers throughout the quarter," said Bruce Efird, ceo.
     He said Fred's sourcing team is "focused on lower costs within home...Home is the biggest challenge at this point in time and we're constantly making changes in our Core 5 and tweaking it."
     • Net income up 3% to $5.1 million or $0.13 per diluted share compared with $5.0 million or 13 cents per share in the year-earlier period.
     • Sales up 1% to $452.7 million.
     • Comps down 0.4% versus.

Gordman's

OMAHA, NEB. - Gordman's home department was hit with a comp decline during the second quarter, and the textiles category was among the lagging merchandise areas.Dec pillows saw some uptick in August with the start of the back-to-school season, said president and ceo Jeff Gordman.
     • Net income down 12% to $2.9 million.
     • Sales up 3.4% to $117.0 million.
     • Comps up 0.4%.

Tuesday Morning

DALLAS - After a difficult fourth fiscal quarter, Tuesday Morning Corp. said it is bent on improving its performance through the back half of the calendar year in time for the holiday selling season.
     "While we are disappointed with the results of our fiscal fourth quarter, we are focused on several key areas to optimize our marketing efforts, improve our customer's experience on our website and drive traffic to our stores," said Kathleen Mason, president and ceo. "These efforts, combined with disciplined cost and inventory management, and prudent capital allocation, will be our focus this year as we strive to drive sales, improve profitability and enhance shareholder value."
     • Quarterly net loss of $1.4 million, or 3 cents per share, compared to net income of $1.3 million, or 3 cents per diluted share.
     • Sales down 3.0% in the quarter to $194.8 million.
     • Comps 4.5%.
     • Fiscal year net income down 11% to $9.6 million, or 43 cents per share.
     • Sales down 0.9% to $821.2 million.
     • Comps down 1.2.

Williams-Sonoma

SAN FRANCISCO - Williams-Sonoma Inc.'s more affluent shopper flocked back to its stores and websites during the second quarter.
     Sharon McCollam, evp, director, coo and cfo, explained, "The high-end consumer is doing well and our high-end products are selling well."
     • Net earnings up 27.6% to $39.3 million, or 39 cents per share.
     • Total sales up 5.1% to $815 million.
     • Company comps up 6.5%.
     • Pottery Barn comps up 4%.
     • Pottery Barn Kids comps up 8%.
     • PBTeen comps up 20%.
     • West Elm comps up 29%.

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