August 18, 2003-- Home Textiles Today,
International demands push inventories higher
Total inventories, including the international division, were up nine percent at Wal-Mart during the second quarter, far above the company's goal of growing its inventories at half the rate of its sales increase, which was 11.3 percent.
Tom Schoewe, evp and cfo, said this was due to it increasing its square footage at more than eight percent, yet with lower than planned sales "it is tough to leverage the remaining inventory."
And, secondly, because the retailer has been increasing its global sourcing, it now owns the merchandise for a longer period of time. "Despite these challenges, we are not changing our goal," he said, "just pointing out the difficulties the current environment makes."
In the Wal-Mart division, executives said that even with below plan sales and the markdowns — which were higher than normal — needed to clear inventory, the division produced more than $3.3 billion in pretax operating income. Roll backs totaled $4.1 billion, and are on track for its annual goal of more than $10 billion.
The company was also pleased with its Sam's Club business. "Our repositioning strategy is working faster than I expected, but we still have a long way to go," said Lee Scott, president and ceo, Wal-Mart Stores. All nine key business segments at Sam's trended up from first quarter levels.
Martha KO'd in Kmart quarter
Due to Kmart's bankruptcy and store closings, sales of Martha Stewart Everyday products at Kmart declined by 21 percent on a comp basis, and 38 percent on a total store basis, executives said during Martha Stewart Omnimedia's second quarter conference call.
Sharon Patrick, president and ceo, added that on a comp store comp category basis, it had a "modest" drop of 10 percent, which excludes live plants, which were dropped from the 2003 line. The overall nine percent decline to date was the result of softer sales of certain housewares items due to competitive pricing, and, because of the inclement weather during the spring, patio furniture.
Sales have improved for the more recent period of July 1 to August 2, increasing approximately 12 percent on a comp store comp category basis, of which one of the largest contributors is the improvement in patio furniture.
"We should note that these swings in sales performance do not materially impact our full-year revenue or profitability numbers as, in accordance with our Kmart contract, we are expected to earn royalties for the full year at guaranteed minimal levels," she said. In addition, the MSE brand label and product is set to launch at Sears Canada next month, in a program of 2,300 skus.
NASDAQ pulls plug on Odd Job listing
Closeouter Odd Job Stores has been delisted from the Nasdaq Stock Market and is now trading on the OTC Bulletin Board under the symbol ODDJ.
The 74-store regional retail company fell out of compliance with a requirement that it maintain a minimum of 400 round lot shareholders. As of July 31, Odd Job had only 220 round lot holders. In addition, the company's common stock did not meet the minimum market value of publicly held shares of $5 million for continued listing.
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