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September Comps Soften

NEW YORK - September comps were strong for most, but in the shadow of a strong August showing suffered by comparison.
     Fred's and Alco Stores tied for the harshest comp decline, each with a 3.8% decline.
     Kohl's was close behind with a 2.7% comp dip after a stronger performance in August. The mid-level department store chain has been up and down in comps over the past several months. Footwear led the company with the strongest comp - a low single digit increase. Home recorded a low single-digit comp decrease, yet it nonetheless outperformed the company. Bedding and bath were singled out as the strongest segments.
     In Alco's case, sales declined due to "slower consumer spending as well as the continued impact of changing weather patterns and drought on the majority of the company's trading area," explained Rich Wilson, president and ceo. "As previously announced, we will be broadening our food offering to include frozen food in 153 stores during the months of October and November. We anticipate this significant enhancement will drive customer traffic and build average basket size."
     The month's comp leaders were the off-price chains - Ross Stores and TJX Cos. While they often report the same comp results, this month TJX's "well above plan" 6.0% comp outdid Ross' also better-than-expected 5.0%.
    Carol Meyrowitz, ceo of TJX, said the company's customer traffic "continued as the driver of our comp sales increases at every division ... Marmaxx also achieved a strong 6% comp sales increase and all divisions delivered excellent performance."

WINNERS AND LOSERS

Same-store sales % change

WINNERS

TJX Cos.

6.0%

Costco Wholesale Corp.

5.0%

Ross Stores

5.0%

Macy's Inc.

2.5%

Stein Mart

2.4%

Target Corp.

2.1%

Bon-Ton Stores

0.6%

LOSERS

Fred's Inc.

-3.8%

Alco Stores

-3.8%

Kohl's Corp.

-2.7%

     Ross updated its outlook, noting that earnings per share for the 13 weeks ending Oct. 27 are now projected to be in the range of 70 cents to 71 cents, compared to 63 cents for the same period last year.
     "The forecasted upside from our previous earnings per share guidance of 63 cents to 66 cents October 22, 2012 is mainly due to a combination of ahead-of-plan sales and merchandise gross margin in August and September, as well as slightly better-than-expected shortage results from our annual physical inventory in September," explained Michael Balmuth, vice chairman and ceo.
     Macy's had the next highest comp, up 2.5%, which was less than half of what the department store reported in August. Still, noted chairman, president and ceo Terry Lundgren, "Our sales in the two-month August/September period, which includes the back-to-school season, were consistent with our positive year-to-date trend. We continue to feel good about the remainder of our fall season as we begin to ramp up receipts of fresh inventory for the cooler weather ahead."
     Macy's online sales for macys.com and bloomingdales.com combined were up 39.0% in September and 35.8% year-to-date. These figures are included in the company's samestore sales calculation.
    Stein Mart continued to make strides month by month. September was no different, as the mid-tier off-price department store chain posted a 2.4% comp, led by linens and ladies' career sportswear.
     The results might have been better had weather not affected the business, explained interim ceo Jay Stein. "Early in the month, sales were impacted by hurricane Isaac resulting in a number of stores not being operational for a period of time."
     Target's 2.1% comp increase was in line with expectations, said Gregg Steinhafel, chairman, president and ceo. "We're pleased with our sales results through the first two months of the quarter and believe we remain on-track to attain our third-quarter sales and profit goals."
     The softest comp gain came from The Bon-Ton Stores, which reported a 0.6% increase.
     Brendan Hoffman, president and ceo, said the regional department store "gained momentum the final two weeks in the month and finished strong. We largely attribute our performance to a better balanced merchandise assortment and refined marketing efforts. Our multi-channel methods of communicating with our customers created excitement and traffic. In addition, our customers continued to respond favorably to the new fall receipts."

SEPTEMBER SALES FOR KEY RETAILERS
Five Weeks Ended September 30, 2012 (dollar amounts in millions) a

 

2012 SALES

2011 SALES

TOTAL % CHG.

SAME-STORE % CHG.

Alco Stores

$40.2

40.3

(0.3)

(3.8)

Bon-Ton Stores Inc.

$288.9

$286.9

0.7

0.6

Costco Wholesale Corp. (b)

$9,310.0

$8,610.0

8.0

5.0

Fred's Inc.

$170.9

$169.5

1.0

(3.8)

Kohl's Corp.

$1,608.0

$1,631.0

(1.4)

(2.7)

Macy's Inc.

$2,358.0

$2,297.0

2.7

2.5

Ross Stores Inc.

$800.0

$726.0

10.0

5.0

Stein Mart Inc.

$102.7

$98.9

3.9

2.4

Target Corp.

$6,075.0

$5,923.0

2.6

2.1

The TJX Companies Inc.

$2,500.0

$2,200.0

10.0

6.0

30 WEEKS

 

2012 SALES

2011 SALES

TOTAL % CHG.

SAME-STORE % CHG.

Alco Stores

$306.5

$301.4

1.7

(1.2)

Bon-Ton Stores Inc.

$1,705.3

$1,709.4

-0.2

(0.1)

Costco Wholesale Corp.

$64,230.0

$58,570.0

9.6

NA

Fred's Inc.

$1,282.0

$1,244.0

3.0

(1.2)

Kohl's Corp.

$11,545.0

$11,455.0

0.8

(0.9)

Macy's Inc.

$16,430.0

$15,839.0

3.7

3.6

Ross Stores Inc.

$6,245.0

$5,549.0

13.0

8.0

Stein Mart Inc.

$761.5

$746.5

2.0

1.3

Target Corp.

$44,607.0

$42,690.0

4.5

3.9

The TJX Companies Inc.

$16,100.0

$14,600.0

10.0

8.0

a. Reporting periods vary among retailers.
b. Costco's September comp results are for the U.S. division and do not include the positive impact of inflation on gasoline prices or the positive impact from foreign currencies. Including those impacts, comps for the month were up 6.0% in the U.S. division, 7.0% in the international division, and 6.0% for the total company.

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