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Winners Outweigh Losers in September Comps

Menomonee FallsNEW YORK - Up against easy comparisons, department stores outpaced off-price chain and discount store comparable store sales in September.
     September's list of winners among the 13 major retailers tracked monthly by HTT far outweighed the "losers" list, which posted only one company - regional discount chain Duckwall- Alco with a 2.3% comp decline.
     Even so, the 256-unit retailer said its business is on the path of recovery as a result of Abilene, Kan.-based Duckwall-Alco's store reorganization initiatives.
     "While September same-store sales were negative, improvement in the trend continues," said Rich Wilson, president and ceo. "Sales in the month were impacted by our store re-set initiative, which is now completed, and the integration of more than 400 new items in the food and consumables departments. Consumers also remain cautious, and our updated offering better reflects this economic reality."
     Flat for the month was Memphis, Tenn.-based Fred's, which was up against uneven comparisons from last year when demands for the H1N and seasonal fl u vaccines and fl u-related products were higher than this past September.
    Better news for the 672-unit Southeastern discounter came in strengthening customer traffic, noted Bruce Efird, Fred's ceo, with "our Core 5 program driving improved sales and margin mix."

Same-store sales % change 

WINNERS

The Bon-Ton Stores Inc. 

5.9% 

J. C. Penney 

5.1% 

Macy's Inc. 

4.8% 

Dillard's Inc. 

3.0% 

Kohl's Corp. 

3.0% 

LOSERS

Duckwall-ALCO 

(2.3)% 

     Looking to the winners in September, York, Pa.-based The Bon-Ton Stores took the lead of the pack with a healthy 5.9% comp increase, which exceeded expectations and was driven in part by home's performance, said vice-chairman and president - merchandising Tony Buccina.
     "Our best performing businesses were home store - including furniture - better missy sportswear, cosmetics, shoes, juniors, kids and accessories," he said. "Ecommerce continues to post sales gains significantly above the total company's sales growth. We are well positioned heading into the critical holiday season with inventory fresher than the prior year period and inventory investment strategically focused on the categories we believe will generate top line growth."
     At a close second place was Plano, Texas-based J. C. Penney, with a 5.1% comp gain. Home made strides along with sales gains for the second consecutive month online at www.jcp.com, which experienced overall sales increases of 3.3%.
     Macy's reported 4.8% comp increases, positioning it as the third best performer in September. The 850-unit department store based in Cincinnati enjoyed said its back-to-school season was the "most successful in years" - crediting the launch of its American Rag private brand and the Madonna juniors brand Material Girl, said Terry Lundgren, chairman, president and ceo.
     Also aiding results is the department store's "My Macy's" localization effort, now in its third year.
     "The sales growth at both Macy's and Bloomingdale's has fueled a high level of energy and spirit within our organization," Lundgren said. "We believe this momentum will work to our benefit as we approach the upcoming holiday selling season."
     Tied for fourth were Kohl's and Dillard's - the latter showing its fi rst signs of improvement after a long soft streak. Sales of shoes at Little Rock, Ark.-based Dillard's were "significantly above trend" for the month while sales of men's apparel and accessories were "significantly below trend." No mention of home's performance was made by the 29-state department store retailer. Footwear also drove monthly sales at Menomonee Falls, Wis.- based Kohl's Corp., said Kevin Mansell, chairman, president and ceo.
     Target's 1.3% comp increase in September was at the low end of the 1,752-unit discounter's expectations. Back-to-school and back-to- college provided "pleasing" results in the period, with strong performances specifi cally in the grocery, beauty and healthcare categories, said Gregg Steinhafel, chairman, president and ceo.
Ross' 2.0% and TJX Cos.' 1.0% comp increases came against tough comparisons over last year, when value conscious off-price stores steadily beat their higher-bracket retail competitors for business.
     But both companies blamed unseasonable weather for the softer- than-usual comps.
     "It's important to note that we believe our comp increases would have been even stronger were it not for the warm and wet weather during the last week of the month, which signifi cantly hurt sales in the Northeast and Mid-Atlantic," said Carol Meyrowitz, Framingham, Mass.- based TJX Cos.'s president and ceo.

SEPTEMBER SALES FOR KEY RETAILERS 

Five weeks ended October 2 (dollar amounts in millions) a

 

2010
SALES 

2009

SALES

TOTAL
%CHG. 

SAME-STORE
SALES SALES %CHG.  

BJ's Wholesale Club b 

$961.6 

$928.1 

3.6 

1.5 

The Bon-Ton Stores Inc. 

$299.2

$282.2 

5.7 

5.9 

Costco Wholesale Corp. c, d 

$7,510.0

$6,840.0 

10.0 

10.0 

Dillard's Inc. 

$532.3 

$519.3 

3.0 

3.0 

Duckwall-ALCO Stores Inc.

$41.1 

$41.4

(0.6) 

(2.3) 

Fred's Inc. 

$169.5 

$166.6 

2.0 

2.0 

J. C. Penney Company Inc. 

$1,480.0

$1,438.0 

2.9 

5.1 

Kohl's Corp. 

$1,542.0 

$1,464.0 

5.3 

3.0 

Macy's Inc. 

$2,183.0 

$2,042.0

6.9 

4.8 

Ross Stores Inc. 

$666.0

$629.0

6.0

2.0

Stein Mart Inc. 

$101.4 

$101.9 

(0.6) 

(0.4) 

Target Corp. 

$5,562.0 

$5,392.0 

3.1 

1.3 

The TJX Companies Inc. 

$2,100.0 

$2,00.0 

6.0 

1.0 

35 WEEKS 

 

2010

SALES

2009

SALES

TOTAL

%CHG.

SAME-STORE

%CHG.

BJ's Wholesale Club b 

$7,027.2 

$6,451.3 

8.9 

4.9 

The Bon-Ton Stores Inc. 

$1,756.3 

$1,733.7 

1.3

1.6

Costco Wholesale Corp. 

$83,810.0

$53,230.0

57.4

NA

Dillard's Inc.

$3,749.6

$3,733.7

0.0

1.0

Duckwall-ALCO Stores Inc.

$301.5

$311.1

(3.1)

(4.2)

Fred's Inc.

$1,220.0

$1,187.0

3.0

2.3

J. C. Penney Company Inc. 

$10,785.0

$10,693.0

0.9

1.9

Kohl's Corp. 

$11,093.0

$10,223.0

8.5

5.3

Macy's Inc.

$14,930.0

$13,947.0

7.0

5.0

Ross Stores Inc.

$5,121.0

$4,647.0

10.0

6.0

Stein Mart Inc.

$759.3

$785.1

(3.3)

(1.5)

Target Corp.

$40,868.0

$39,176.0

4.3

2.1

The TJX Companies Inc.

$13,800.0

$12,600.0

9.0

5.0

a. Reporting periods vary from chain to chain.
b. Merchandise comparable club sales excluding the impact of gasoline increased 0.8% for the month and 2.9% year to date.
c. Total sales results include sales from the company's Mexico joint venture.
d. Comp club results are for the U.S. division. Excluding the positive impacts of inflation in gasoline prices and strengthening foreign currencies (primarily in Canada and Korea), comparable club sales
for the month were up 2% in the U.S. division, 10% in the international division, and 4% for the total  company. 

     Still, she added, "we are pleased that September consolidated comparable store sales were at the high end of our expectations, and The Marmaxx Group exceeded our planned range. Both of these increases were achieved over high-single-digit comp sales increases last year." September comp results by division included: Marmaxx, 2.0% versus a 9.0% increase last year; Home Goods, 2.0% versus 12.0% last year; A.J. Wright, down 1.0 versus up 14.0% last year; Winners and Home Sense, up 4.0 over a 1.0% decline last year.
     Added Michael Balmuth, vicechairman and ceo of Pleasanton, Calif.-based Ross Stores: "While we experienced unseasonably warm weather during the month in many of our core markets, we still were able to achieve same store sales at the high end of our expectations. Dresses and home were the top merchandise categories during the month, while Florida was the best-performing market."
     With that, both companies updated their guidance for the third quarter.
     TJX Cos. now expects its third quarter earnings per share to be in the range of 89 to 91 cents. "As we move through the fall selling season, we are in an excellent inventory position, which enables us to take advantage of the quantity and quality of product that we are seeing in the marketplace," Meyrowitz explained.
     Ross Stores' earnings per share for the 13 weeks ending October 30 are now projected to be in the range of 94 to 96 cents, compared to 84 cents in last year's third quarter.
     "The forecasted upside from our previous earnings per share guidance of 79 to 83 cents is being driven mainly by much better-than-expected shortage results from our annual physical inventory of stores in September along with other favorable gross margin trends," Balmuth said.
     "Our lower projected shrink expense for 2010 reflects the significant progress we have made over the past few years in successfully implementing our shortage control initiatives. Our updated third quarter guidance also reflects our continued expectation for October same store sales to be fl at to up 1%.

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