Weather woes bring slow start to retailer summer
July 14, 2003,
April showers extended into the month of June last month, making it tough for retailers to rid themselves of summer merchandise, though some recovered toward the end of the month as the temperatures rose.
The home area proved to be strong for some retailers, while fell among the weakest categories for the month for others.
Inventories were still above the goal at Wal-Mart, thought the warm weather was helping to bring them down and move summer items, the company said. Wal-Mart Stores grew to $24.635 billion for the period, an increase of 11.1 percent, and had comps overall of 2.7 percent. The Wal-Mart division climbed 9.5 percent to $16.7 billion, and saw comps of 2.4 percent, while Sam's Club increased 8 percent to $3.4 billion, and with comps of 4.1 percent.
Target Corp. saw total sales increase 7.9 percent, and comps 0.8 percent.
"Sales in June were on plan at both Target Stores and Marshall Field's and well below plan at Mervyn's," said Bob Ulrich, chairman and ceo. "Given the significance of this month's contribution to our second quarter earnings performance, we now expect our most likely EPS outcome in the quarter to be 39 cents or 40 cents." Inventories at all divisions were in good condition, the company added.
Home performed as one of the strongest areas for Mervyn's, although the division had the worst overall comps in the group, at negative 12.7 percent.
Sears' home fashions and home decor category slipped in the low double digits for the month, the company said, and overall the company had comps of minus 1.8 percent. The Great Indoors' same-store sales were also down, in the high teens.
At the MarMaxx group of TJX, home fashions fell by 4 percent, which the company felt was due to last year's strong increase of 15 percent during the same reporting period. MarMaxx overall had flat comps, while Winners and HomeSense were up 2 percent; HomeGoods was up 1 percent; T.K. Maxx was up 5 percent; and A.J. Wright was up 10 percent. The company overall had a comparable sales increase of 2.0 percent.
"June sales were below expectations due to the continued cool and rainy weather patterns that persisted primarily in the Northeast region of the U.S. during the first half of the month," said Edmond English, president and ceo. "We saw business pick up in the latter half of the month, as the weather turned summer-like."
With comps dipping 2.0 percent, Federated said that its performance was consistent with its outlook, and expects July to be down one to two percent.
Kohl's, which saw comps decrease 2.4 percent, said that its home area performed below the company average. In addition, the late onset of summer weather caused it to be more aggressive in pricing throughout the quarter. Those markdowns will continue to put it in good position for the Back-to-School season, it said.
JCPenney reported that sales, soft early in the month, strengthened during Father's Day and for the rest of the month. Home was among the best performing categories, along with children's and family shoes. The total company saw a slight same-store sales increase of 0.8 percent.
Its catalog/Internet division also recorded a second consecutive month of positive gains, with a 1.5 percent increase. Internet sales continued to accelerate, growing by more than 60 percent for the period. Outlet store sales declined, primarily due to fewer stores, the company said.
With an increase of 11.2 percent to $4.28 billion, Costco reported softlines grew 7 percent, and within that category, the strongest areas were domestics and media.
Home was a positive spot for several other retailers, including Saks Department Store Group, Ross Stores, and Elder-Beerman, while Dollar General found its domestics department was among the strongest performers. Dillard's home area was in line with its company average, down 7 percent.
Pier 1 Imports saw sales improve the last three weeks of the five-week period in response to a mid-month promotional event. "Merchandise margins remain strong, and there was a good blend of promotional and regular-priced merchandise sales during the month as the sell through of seasonal merchandise continues," said Marvin Girouard, chairman and ceo.
|May Department Stores||-5.9|
June sales for major retailers (period ending 7/5/03)a
sales in $millions
|Company||2003 sales||2002 sales||Total % change||Same-store % change|
|a: Reporting periods vary from store to store.
b: For the period ending July 6.
c: For the period ending July 4.
d: For the period ending June 28.
|Dillard Dept. Stores||635.7||685.6||(7.3)||(6.0)|
|May Dept. Stores||1,131.9||1,178.7||(4.0)||(5.9)|
|Pier 1 Imports||165.5||158.0||4.7||(2.9)|
|Sears U.S. sales||2,664.0||2,696.7||(1.2)||(1.8)|
|Value City Dept. stores||134.0||138.0||(2.9)||(2.1)|
|Wal-Mart Stores Incc||24,635.0||22,164.0||11.1||2.7|
|22 weeks to date|
|Dillard Dept. Stores||$2,986.3||$3,173.3||(5.9%)||(5.0%)|
|May Dept. Stores||5,009.6||5,300.2||(5.5)||(7.2)|
|Pier 1 Imports||568.2||542.5||4.8||(3.4)|
|Sears U.S. sales||10,986.9||11,429.4||(3.9)||(4.7)|
|Value City Dept. stores||585.6||602.6||(2.8)||(2.2)|
|Wal-Mart Stores Inc.||101,957.0||92,495.0||10.2||2.5|
Related Content By Author
The Countdown to the ICON Honors Continues featuring Christophe Pourny