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Retailers Deliver Mixed Third-Quarter Results

NEW YORK — Retailers reporting third-quarter results Thursday were pleased how shoppers responded to fall merchandise sets, but disappointed over being forced into some markdown activity. <BR><BR>Regarding the fourth-quarter holiday shopping...

NEW YORK — Retailers reporting third-quarter results Thursday were pleased how shoppers responded to fall merchandise sets, but disappointed over being forced into some markdown activity.

Regarding the fourth-quarter holiday shopping season, they were generally upbeat.

Boasting strong top-line growth were: The Bon-Ton Stores with a 65 percent increase in sales to $297.8 million; Stage Stores Inc. with a 44.2 percent gain to $285.3 million; Dick’s Sporting Goods with a 60 percent increase to $541 million; and Stein Mart Inc. with a 5.4 percent gain to $330.4 million.

Sales at ShopKo Stores fell 1.6 percent to $746.4 million while Kmart Holding Corp. dropped 13.7 percent.

On the bottom line, results were mixed. Bon-Ton’s earnings shot up 73.8 percent to $7.3 million while ShopKo’s doubled to $2 million. Stage Store’s net income dropped 26.4 percent to $9.5 million while Stein Mart narrowed its loss in the quarter to $2 million from $10.4 million in the same period last year.

The standout performer of the day was specialty retailer Aeropostale Inc., which delivered a net income gain of 44.7 percent to $31.7 million on a sales increase of 24.8 percent to $274.6 million.

Julian R. Geiger, chairman and chief executive officer, said in a statement that Aeropostale’s “unique combination of highly effective promotional strategies, careful inventory control and fashion-right merchandise has enabled us to report record earnings.”

Geiger went on to say that the current base of 560 stores “is operating at productivity levels in excess of $500 per square foot. We have grown quickly in the last six years and we believe we have an opportunity for continued aggressive growth and to operate as many as 1,000 profitable Aeropostale stores ultimately.”

Meanwhile, Jim Scarborough, chairman, president and ceo of Stage Stores, said in a statement that the company experienced a 4.3 percent same-store sales gain, which was driven by “the beneficial impact from the shift in our Texas sales tax holiday weekend” as well as the “accretive impact” of the Peebles stores acquisition, which was over a year ago.

“In conjunction with this increase, most of our major merchandise categories achieved comparable-store sales gains during the period, and our small-, mid-size and large-market groups all had positive comparable-store sales results,” Scarborough said.

This story first appeared in the November 19, 2004 issue of WWD.  Subscribe Today.

Scarborough went on to say that the retailer’s buyers “have done an outstanding job in selecting highly appealing seasonal merchandise, and we are upbeat about our prospects for the upcoming holiday shopping period.”

Michael D. Fisher, president and ceo of Stein Mart, said in a statement that “sales were driven by an enthusiastic response to new fall merchandise and to the colorful assortments which have resonated with customers all year.

“Although markdowns had to be increased post-hurricanes to achieve our stricter inventory targets for in-season merchandise, that effort resulted in much cleaner inventory levels for featuring new fall and holiday fashion going forward,” Fisher added.

At Dick’s, same-store sales gained 1.5 percent. Strong sellers in the quarter were women’s and kid’s footwear and apparel, team sports, cleats and accessories, as well as private label apparel, said Edward W. Stack, chairman and chief executive, on a conference call Thursday.

“We continue to see very positive results in our women’s apparel business, both in the athletic apparel component and outdoor and rugged outdoor component,” he noted.

3Q Retail Scorecard (figures are in millions)

3Q 2003 3Q 2004
Retailer Sales Net Income Sales Net Income
Aeropostale $220.00 $21.90 $274.60 $31.70
The Bon-Ton Stores $180.40 ($1.70) $297.80 ($0.80)
Deb Shops Inc. $218.00 $4.20 $221.20 $7.30
Dicks Sporting Goods Inc. $338.20 $4.70 $541.00 ($1.80)
Dillard’s Inc. $1,764.50 ($15.80) $1,698.90 ($18.70)
Kmart Holding Corp. $5,092.00 ($23.00) $4,392.00 $553.00
ShopKo Stores $758.50 $1.00 $746.40 $2.00
Stage Stores Inc. $197.90 $12.90 $285.30 $9.50
Stein Mart Inc. $313.60 ($10.40) $330.40 ($2.00)

Source: Company reports. Includes charges and any gains incurred during the reporting periods.