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Sales Slump at Year's End

James Mammarella -- Home Textiles Today, February 12, 2008

The retail year ended pretty much the same way the holiday season started: with a "hard times" feel for major department store chains and discounters alike, but with bright spots for the off-price giants and warehouse clubs.

It was no surprise to most when in February three retailing behemoths — JCPenney, Macy's and Sears Holdings — each announced streamlining and restructuring steps while pledging to find their way to renewed profit growth in the coming year.

The comp-store gain in January was 0.2% at U.S. Wal-Mart stores, while Sam's Club had a 4.9% gain (more than half from fuel sales). For the year, U.S. Wal-Mart stores were up 0.9% in comps, while Sam's surged 4.9%. The U.S. gain overall was 1.5%, or 1.4% minus the fuel sales impact.

The story at Target was a 1.1% comp drop for January, "near the lower end of our planned range," said chairman and ceo Bob Ulrich.

JCPenney reported a 1.9% comp sales falloff for the month, compared to guidance for a mid-single digit decrease; "home and jewelry" were cited as the weakest categories.

Macy's, which reported its January sales a day early along with its restructuring announcement, saw monthly comps fall 7.1%, well below the retailer's guidance of a comp drop of 4% to 6%.

In a mixed picture at Bon-Ton Stores, its Carson's division saw comps fall 3.2%, while the Bon-Ton unit showed a 2.4% comp rise; overall the company reported a 1.3% comp drop.

Off-price leader TJX Companies posted a solid 3% comp gain for the month, good enough for president and ceo Carol Meyrowitz to offer: "We now expect fourth-quarter earnings per share from continuing operations to be near the high end of our previously anticipated range of $0.60 to $0.63. We enter the spring selling season in an excellent position to drive sales, with great liquidity in our inventories."

Off-price challenger Ross Stores achieved a 1% comp rise, and noted, "Based on favorable gross margin and expense trends," that quarterly earnings per share "will be $0.69 to $0.70," up from previous guidance of $0.68 to $0.69.

Measured by the Johnson Redbook Same Store Sales Index, comp store sales were up 0.3% in January, following a 0.6% drop in December, which came after a 4.2% gain in November.

Department store operators were particularly hard-pressed to show positive comps, with Redbook citing a 5.6% drop for the segment. Discounters managed a 1.4% comp sale rise for the month, which ended Saturday, Feb. 2.

Of the 45 retailers covered in its Index, Redbook noted that Dillard's and two specialty chains saw double-digit comp drops for the month. More than half the covered chains, 53%, reported negative comps.

Winners and Losers
Same-store sales % change

Winners
BJ's 7.8%
Costco 7.0
Sam's Club 4.9
TJX 3.0
Ross Stores 1.0
Losers
Dillard's -12.0%
Kohl's -8.3
Gottschalks -7.4
Macy's -7.1
Bon-Ton -3.6
Duckwall-ALCO -3.1
Stein Mart -2.5
JCPenney -1.9
Fred's -1.2
Target -1.1


January sales for key retailers
Four weeks ended February 2a(dollar amounts in millions)

2008 sales 2007 sales Total % chg. Same-store % chg.
a. Reporting periods vary from chain to chain.
b. Bon-Ton: 4 weeks Jan. 2008 compared to 5 weeks Jan. 2007
c. Costco: 5 weeks and 22 weeks ended Feb. 3.
d. Dillard's: Percentage comparisons are 4 wks v. 4 wks and 52 wks v. 52 wks.
e. Duckwall-ALCO: 5 weeks and year-to-date ended Feb. 3.
f. Kohl's: 4 weeks Jan. 2008 compared to 5 weeks Jan. 2007
g. Macy's: 4 weeks Jan. 2008 compared to 5 weeks Jan. 2007
h. Wal-Mart: 4 weeks and 52 weeks ended Feb.1.
i. Family Dollar: year-to-date comps stated, but not year-to-year net sales.
BJ's Wholesale Club $652.0 $586.2 11.2 7.8
The Bon-Ton Stores b $187.6 $240.6 (22.0) (3.6)
Costco c $5,110.0 $4,620.0 11.0 7.0
Dillard Dept. Stores d $435.2 $622.9 (12.0) (12.0)
Duckwall-ALCO e $37.1 $28.6 29.7 (3.1)
Family Dollar $482.3 $468.5 2.9 0.0
Fred's $133.5 $132.2 1.0 (1.2)
Gottschalks $30.1 $33.2 (10.3) (7.4)
J.C. Penney $1,163.0 $1,140.2 2.0 NA
Dept. stores $963.0 $946.9 1.7 (1.9)
Catalog/e-commerce $200.0 $194.0 3.6 NA
Kohl's Corp. f $791.4 $994.8 (20.4) (8.3)
Macy's g $1,275.0 $1,782.0 (28.4) (7.1)
Ross Stores $350.0 $322.0 9.0 1.0
Stein Mart $81.0 $100.1 (19.1) (2.5)
Target Corp. $4,106.0 $3,896.0 5.4 (1.1)
TJX Cos. $1,130.0 $1,060.0 7.0 3.0
Wal-Mart Stores Inc. h $27,280.0 $25,289.0 7.9 0.9
Wal-Mart Stores $16,937.0 $16,361.0 3.5 0.2
Sam's Club $3,156.0 $2,977.0 6.0 4.9
International $7,187.0 $5,951.0 20.8 NA
52 WEEKS FULL YEAR
BJ's Wholesale Club $8,814.0 $8,156.9 8.1 3.7
The Bon-Ton Stores b $3,365.9 $3,362.3 0.1 NA
Costco c $29,640.0 $26,650.0 11.0 8.0
Dillard Dept. Stores d $7,204.9 $7,635.3 (5.6) (5.0)
Duckwall-ALCO e $499.0 $467.3 6.8 0.8
Family Dollar i $2,981.9 NA NA (0.8)
Fred's $1,780.0 $1,770.0 1.0 0.3
Gottschalks $628.5 $683.9 (8.1) (5.1)
JCPenney $19,860.0 $19,903.0 (0.2) NA
JCPenney stores $17,014.0 $16,948.0 0.4 (1.1)
Catalog/e-commerce $2,846.0 $2,955.0 (3.7) NA
Kohl's Corp. $16,473.7 $15,596.9 5.6 (0.8)
Macy's $26,316.0 $26,970.0 (2.4) (1.3)
Ross Stores $5,975.0 $5,486.0 9.0 1.0
Stein Mart $1,457.6 $1,501.3 (2.9) (4.0)
Target Corp. $61,471.0 $56,865.0 8.1 3.0
TJX Cos. $18,700.0 $17,400.0 7.0 NA
Wal-Mart Stores Inc. h $375,408.0 $345,408.0 8.5 1.5
Wal-Mart stores $238,973.0 $225,944.0 5.8 0.9
Sam's Clubs $44,254.0 $41,509.0 6.6 4.9
International $92,181.0 $78,437.0 17.5 NA


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