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June Divides Haves From Have-nots

NEW YORK - If ever a month marked a clear divide in comp results between key retailers, it was June.
     Over the five-week period that ended June 30, the 10 major retailers tracked monthly by HTT were evenly split - five of them saw comp gains, and five suffered declines - some of them steep.
     Maintaining their winning streak were the off-price chains - TJX Cos. and Ross Stores, who tied for first place with 7.0% comp gains.
     Ross Stores' Michael Balmuth, vice chairman and ceo, said sales were better than expected. "Our ongoing ability to deliver terrific name brand bargains to today's value-focused shoppers drove broad-based merchandise and geographic sales gains during the month," he added.
     Ross is now forecasting second-quarter earnings per share of 77 to 78 cents, up from its previous projection of 72 to 75 cents.
     TJX ceo Carol Meyrowitz, said all business in the United States, Canada and Europe performed well in June. "Customer traffic during the month increased substantially at every division, which speaks to the tremendous appeal of our values, brands and fashions for consumers," she said.
     TJX also raised its second quarter EPS guidance to 52 to 53 cents - which would represent double-digit growth on top of double-digit growth in last year's second quarter. For the full fiscal year, TJX boosted its EPS guidance to $2.31 to $2.39.
     "We are very well-positioned to buy into the opportunities we are seeing in the marketplace and offer consumers exciting brands and fashions at great values," said Meyrowitz.

WINNERS AND LOSERS

Same-store sales % change

WINNERS

Ross Stores

7.0%

TJX Cos.

7.0%

Costco Wholesale Club

3.0%

Target Corp.

2.1%

Macy's Inc.

1.2%

LOSER

Duckwall-Alco

-5.9%

Kohl's Corp.

-4.9%

Fred's Inc.

-4.0%

The Bon-Ton Stores

-0.8%

Stein Mart Inc.

-0.5%

     The next biggest comp in-crease was a far notch down - 2.1% - from Target Corp, which called the results near the low end of its expected range. "We believe these results, combined with our outlook for July, keep us on-track to deliver second-quarter sales and adjusted EPS in line with the guidance we provided at the time of our first-quarter earnings release," said Gregg Steinhafel, chairman, president and ceo.
     Macy's 1.2% comp increase landed below expectations. Terry Lundgren, chairman, president and ceo, explained "in part, this was a function of a macroeconomic environment that is stagnant at best, and lower spending by tourists in cities such as New York."
     Additionally, he went on, "the unprecedented renovation at Macy's Herald Square in New York City ... is well under way but created more short-term business disruption than anticipated in the June sales period."
     June bright spots for Macy's included strong Father's Day sales and Macy's nationwide promotion of Brazil-inspired fashion.
     Among the key retailers with the sharpest comp declines in June were Duckwall-Alco (-5.9%), Kohl's Corp. (-4.2%), and Fred's Inc. (-4.0%).
     "Although we had expected June to be a challenging month due to the fiscal calendar shift, sales were disappointing" for Duckwall-Alco, said Rich Wilson, president and ceo. "Unlike the prior year, customer shopping patterns shifted out of the June fiscal period due to the timing of the first few days of July and the Fourth of July shopping weekend. In addition, severe thunderstorms over the weekend negatively impacted holiday sales. Finally, there appears to be ongoing concern in consumer confidence regarding macro-economic conditions. While we work continuously to provide great products at great values, same-store sales were most negatively impacted in non-essential categories."
     At Kohl's, although June sales were "again lower than expectations," said chairman, president and ceo Kevin Mansell, the 1,134-unit chain remains "encouraged by improved sales in the latter weeks of the month as we continued to build inventory levels."
     As a result of its quarter-to date performance, Kohl's now expects second-quarter earnings per share at the low end of its previous guidance of 96 cents to $1.02.

JUNE SALES FOR KEY RETAILERS

Five weeks ended June 30, 2012 (dollar amounts in millions) a

 

2012
SALES

2011
SALES

TOTAL
% CHG.

SAME-STORE
% CHG.

The Bon-Ton Stores Inc

$238.3

$240.8

(1.0)

(0.8)

Costco Wholesale Corp. (b)

$9,180.0

$8,690.0

6.0

3.0

Duckwall-ALCO Stores Inc.

$46.8

$48.1

(2.9)

(5.9)

Fred's Inc.

$182.6

$179.4

2.0

(4.0)

Kohl's Corp.

$1,708.0

$1,754.0

(2.6)

(4.2)

Macy's Inc.

$2,412.0

$2,392.0

0.8

1.2

Ross Stores Inc.

$886.0

$793.0

12.0

7.0

Stein Mart Inc.

$104.7

$104.5

0.2

(0.5)

Target Corp.

$6,419.0

$6,256.0

2.6

2.1

The TJX Companies Inc.

$2,300.0

$2,100.0

9.0

7.0

22 WEEKS

 

2012
SALES

2011
SALES

TOTAL
% CHG.

SAME-STORE
% CHG.

The Bon-Ton Stores Inc.

$1,062.2

$1,071.8

-0.8

(0.7)

Costco Wholesale Corp.

$40,270.0

$36,370.0

10.7

NA

Duckwall-ALCO Stores Inc.

$202.4

$197.7

2.4

(0.2)

Fred's Inc.

$835.1

$807.4

3.0

(0.8)

Kohl's Corp.

$7,288.0

$7,287.0

0.0

(1.7)

Macy's Inc.

$10,569.9

$10,217.0

3.4

3.6

Ross Stores Inc.

$3,989.0

$3,529.0

13.0

8.0

Stein Mart Inc.

$509.9

$506.6

0.7

0.2

Target Corp.

$27,994.0

$26,635.0

5.1

4.4

The TJX Companies Inc.

$10,000.0

$9,100.0

10.0

8.0

a. Reporting periods vary among retailers.

b. Costco’s June comp results are for the U.S. division and do not include the minimal impact of deflation in gasoline prices or the negative impact from foreign currencies. Including those impacts, comps for the month were up 3.0% in the U.S. division, 2.0% in the international division, and 3.0% for the total company.

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