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September's buoyancy sinks in October

Cecile Corral, Jeff Linville -- Home Textiles Today, December 11, 2010

NEW YORK - The glimmer of light that shone in September, when all 13 of the key retailers tracked monthly by HTT posted positive comp results, turned dim in October as six reported declines.
     Each blamed unseasonably warm weather, especially in the back half of the month.
     The two biggest comp losers, Stein Mart with a 6.5% decline and Stein Mart at -4.2% for the four-week period, posted deeper losses than the list's biggest comp winner, Costco, which reported a 4.0% comp club increase for the month.
     Only one retailer - TJX Cos. - came in with flat comps in October, hitting the high-end of its expectations, said Carol Meyrowitz, president and ceo.
     "I am particularly pleased as October was one of the warmest in recent history, which was not conducive to shopping for cold weather apparel," she said.
     Encouraged by this performance, TJX now expects earnings per share for the quarter to be at the high end of its projected range of 89 cents to 91 cents.
October Same-Store Sales     "We are in a great position to make the right buys and flow the right merchandise into our stores throughout the holiday season and continue to see opportunities to drive sales and margins in the fourth quarter," Meyrowitz added.
     Jacksonville, Fla.-based Stein Mart, which operates 263 units, said its sales performance in October was impacted by changes in the promotional calendar compared to the prior year, "which accelerated sales into the early months of the quarter." Warmer-than-normal weather was also to blame.
     By product category, home textiles along with ladies' special sizes and casual sportswear experienced weakness in the month.
     The Bon-Ton Stores, based in York, Pa., also attributed its declines to the weather.

WINNERS

Same-store sales  change

WINNERS

Costco Wholesale Corp.

4.0%

Ross Stores

4.0% 

BJ's Wholesale Club

 3.7%

Macy's Inc.

 2.5%

Target Corp.

 1.7%

Fred's Inc.

 1.2%

LOSERS

Stein Mart Inc.

 (6.5)%

The Bon-Ton Stores Inc.

 (4.2)%

Duckwall-Alco

 (3.7)%

Kohl's Corp.

 (2.5)%

J.C.Penney

 (1.9)%

Dillard's Inc.

 (1.0)%

     "Unseasonably warm weather in the month pressured demand for cold-weather merchandise; the weak performance of these categories resulted in the sales decrease for the month," said Tony Buccina, vice chairman and president - merchandising, of the 277-unit chain. "By contrast, we experienced sales increases in dresses, shoes, cosmetics and better missy and better men's sportswear. We are excited about the upcoming holiday shopping season; our inventories are fresh with outstanding new offerings and clearance 9% below the prior year period."
     Of the six retailers with comp declines, Little Rock, Ark.-based Dillard's had the least with a - 1.0% loss. But its home business - including furniture - was among the mostly poorly performing areas of the store.
     Taking a sharp turn from September, when they were among the higher comp gainers, were Kohl's and JCPenney with -2.5% and -1.9% comp declines, respectively, in October.
     Kohl's did better in the second half of the month, but not enough to offset the harsh warm-weather impacts to the first two weeks.
     Kevin Mansell, chairman, president and ceo, noted Kohl's footwear business "again reported the strongest comparable store sales" and its e-commerce business "continues to report strong growth."
     JCP's sales of "non-weather sensitive merchandise," such as fashion jewelry, luggage and housewares as well as beauty products through Sephora, "continued their positive sales trend for the month." Overall, shoes and men's apparel were the top performing divisions, and sales of the recently installed Liz Claiborne merchandise "continue to perform very well, ahead of expectations, attracting new customers to JCPenney," the 1,100-unit plus mid-tier department store said.
     Warehouse clubs Costco and BJ's lead the winner's pack along with off-price chain Ross Stores.
     At Natick, Mass.-based BJ's, sales of food drove the performance with 5% category sales increases versus sales of general merchandise, which decreased about 3% for the month

OCTOBER SALES FOR KEY RETAILERS 

Five weeks ended October 30 a (dollar amounts in millions) a

 

2010 SALES

2009 SALES 

TOTAL % CHG.

SAME-STORE % CHG

BJ's Wholesale Club b

 $812.7$764.7
6.3
3.7

The Bon-Ton Stores Inc.

$214.2

$224.0 

(4.4)

(4.2)

Costco Wholesale Corp. c d

$6,300.0

$5,690.0

11.0

4.0

Dillard's Inc.

$356.1

$361.7

(2.0)

(1.0)

Duckwall-ALCO Stores Inc.

$34.4

$34.9

(1.7)

(3.7)

Fred's Inc.

$131.1

$127.9

3.01.2

J. C. Penney Company Inc.

$1,270.0$1,313.0(3.3)(1.9)

Kohl's Corp.

$1,260.0

$1,273.0

(1.0)(2.5)

Macy's Inc.

$1,807.0

$1,693.0

6.82.5

Ross Stores Inc.

$600.0

$557.0

8.0
4.0

Stein Mart Inc.

$85.5

$92.2

(7.2)(6.5)

Target Corp.

$4,641.0

$4,541.0

2.21.7

The TJX Companies Inc.

$1,800.0

$1,700.0

5.00.0

39 WEEKS

 

2010 SALES

2009 SALES

TOTAL % CHG.

SAME-STORE % CHG.

BJ's Wholesale Club b

$7,840.0

$7,220.0

8.64.8

The Bon-Ton Stores Inc.

$1,970.5

$1,957.7

0.70.9

Costco Wholesale Corp. e

$13,810.0

$12,530.0

10.03.0

Dillard's Inc.

$4,105.6

$4,095.4

0.01.0

Duckwall-ALCO Stores Inc.

$335.8

$346.0

(2.9)(4.2)

Fred's Inc.

$1,356.0

$1,315.0

3.02.1

J. C. Penney Company Inc.

$12,056.0 

$12,006.0

0.41.5

Kohl's Corp.

$12,353.0

$11,496.0

7.44.4

Macy's Inc.

$16,735.0 

$15,640.0

7.04.7

Ross Stores Inc.

$5,721.0

$5,204.0

10.06.0

Stein Mart Inc.

$844.8

$877.3

(3.7)(2.0)

Target Corp.

$45,509.0

$43,717.0

4.12.0

The TJX Companies Inc.

$15,600.0

$14,300.0

9.04.0

a. Reporting periods vary from chain to chain.
b. Excluding gasoline, merchandise comparable club sales increased 2.2% for the four-week period. Year to date merchandise comparable club sales excluding gasoline increased 2.8%.
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, comparable club sales for the month were up 3% in the U.S. division, 10% in the international division, and 5% for the total company.
e. Because it is on a different fiscal calendar than most of the other key retailers on this list, Costco's year-to-date sales and comp results reflect the past nine-week period. Excluding the positive impact of inflation in gasoline and strengthening foreign currencies, comparable club sales were up 2% in the U.S., 10% in the International division, and 4% for the total company for the nine-week period.

     Home was one of two top-performing merchandise categories at Pleasanton, Calif.-based Ross Stores, where overall sales of $600 million for October were ahead of expectations of fl at to up 1.0%, said Michael Balmuth, vice chairman and ceo.
     Another surprise - Florida was the best performing market for Ross in the month.
     Balmuth added that based on better-than-expected sales and margins in October, the 990-unit Ross and 67-unit dd's Discounts retailer now estimates earnings per share for the 13 weeks ended Oct. 30 will increase 20% to 21%, to $1.01 to $1.02, from last year's 94 cents per share.
     "While we experienced some softness in sales early in October given the unseasonably warm weather, we ended the month with a strong trend going into the holiday selling season," said Terry Lundgren, chairman, president and ceo of Cincinnati-based Macy's Inc., which enjoyed a 2.5% comp gain following its September 4.8% increase.

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