Retailers find solace in April, but home lags
May 8, 2008,
New York – There were more winners than losers among retail chains in April, with respectable comp-store gains helping take some of the sting out of a very tough quarter; the outlook for May was subdued.
Sam’s celebrated its 25th anniversary during the month, with promotions helping to push up consumables, office supplies and electronics, while apparel and home lagged. Like a number of other retailers that do not operate on Easter Sunday, this Wal-Mart division said it benefited from the shift of Easter to March this year, making for a stronger April-to-April comparison.
Citing “above-plan sales, better-than-expected merchandise gross margin” and other factors, Ross Stores vice chairman, president and ceo Michael Balmuth said first-quarter earnings per share “are now estimated to be 59 cents to 60 cents, up from our prior range of 56 cents to 58 cents. This forecast compares to earnings per share of 48 cents for the first quarter ended May 5, 2007.”
TJX also added a penny or so to its planned earnings, citing “strong margin performance” built on above-plan comps and “sharp execution of our inventory strategies,” according to Carol Meyrowitz, president and ceo.
“The home area remains soft,” Wal-Mart stated, a familiar refrain, but not enough to keep it from a 2.6% comp gain in U.S. stores. Tom Schoewe, evp and cfo, projected “U.S. comparable store sales, excluding fuel, for the May four-week period to be between flat and 2%.”
Comps of 3.1% were “slightly” below plan at Target, said ceo Gregg Steinhafel. The weakest categories, Target announced, were “jewelry/accessories, decorative home, and seasonal/holiday.” The 1,613-store company sees May comps coming in from -1.0% to 1.0%.
At JCPenney, “the top performing merchandise divisions during the month were in apparel and family footwear, while fine jewelry and home categories continued to experience weaker sales,” the company stated. Posting a comp decline of 1.7% for April, the 1,074-unit department store chain forecast a mid-single digit decrease for May.
The April 3.5% comp gain at Kohl’s led chairman and ceo Larry Montgomery to say, "We were encouraged… as business in seasonal categories improved.” The company now expects to exceed its previous quarterly guidance of 40 cents to 42 cents EPS. Still, the Kohl’s recorded monthly note stated: “Home underperformed the company for the month and the quarter.”
“The weakest performing categories were in home – soft, hard and furniture – which compared unfavorably to the strong results in April of last year and the recent solid performance,” commented Bon-Ton Stores vice chairman and president-merchandising Tony Buccina, as the 280-door department store operator reported a comp decline of 0.9% for April.
“Sales in the home and furniture category were significantly below trend,” announced Dillard’s as it posted an April comp drop of 4.0%.
The Johnson Redbook Same Store Sales Index (SSI) reported a 3.3% comp gain in April, which followed a 1.0% comp decline in March among the 40 mostly softlines retailers tracked. Nearly two-thirds of the chains reported positive comps this month – a direct reversal from March, when 70% had comp drops.
The department store segment of the SSI finally broke into positive ground with a 0.7% gain, the first time since November that upstairs chains in the SSI showed a comp gain.
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