June Comps Prompt Some Retailers to Update Guidance

NEW YORK - Coming off a period that delivered unexpected comparable sales results - some good, some bad - several of the majors updated their guidance for the upcoming reporting periods.
     • Macy's said it is again raising its guidance for second quarter sales. The company now expects same-store sales to rise by 6% in the second quarter, which would calculate to same-store sales growth of 4.8% for the full year of fiscal 2011. Initial guidance called for an increase of about 4% in the second quarter and 4.3% for the full year. Following a strong May, second quarter guidance was raised on June 1st to an increase of 5% in the second quarter and 4.5% for the full year of fiscal 2011. Year-over-year same-store sales increases in July will be lower than in May and June because of stronger year-ago sales in the final month of the quarter, the company added.
     • TJX Cos. said it now expects diluted earnings per share to be at or slightly above the high end of its previously projected range of 81 to 86 cents, compared with 74 cents per share last year. The guidance is now based upon estimated consolidated comparable store sales growth of 3% to 4% in the second quarter.
     • Ross Stores said that "based on our better-than-expected sales and gross margin performance in May and June, as well as our continued expectation for a 2% to 3% increase in July same store sales," the off-price retailer is now forecasting earnings per share for the second quarter ending July 30 to be $1.20-$1.22, up from the prior range of $1.15-$1.20.
     • JCPenney explained that "given the softer-than-anticipated selling environment for the moderate customer and the resulting higher level of promotional activity during the quarter," it now expects comparable store sales for the second quarter to increase approximately 1% to 2% and for earnings per share to be in the area of last year's second quarter, when it reported earnings of 6 cents per share. The company added that it will update its outlook for the full year 2011 when it releases second quarter earnings on Aug. 12.
     • Fred's ceo, Bruce A. Efird, noted ,"June sales reflected the volatility experienced with our customers' purchase patterns and demonstrated the broader decline in consumer sentiment that has been reported for the month. After a solid start in the first half of June, we saw a significant downward adjustment in the last half of the month as customer traffic remained positive, but our average customer ticket declined. Another example of the challenging economy was seen in the paycheck cycle, which was very pronounced in the final weeks of the month, but the sales on July 1 were the highest single-day amount for the year." With that in mind, the discount chain expects July sales to "obviously be pivotal for our second quarter results. Because of less-than-expected May and June sales," Fred's now expects second quarter earnings to be at the low end of its forecasted range.

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