Byline: Catherine M. Curan
NEW YORK — Citing unseasonably warm weather, several major retailers reported Thursday that September sales were disappointing, weak enough in some cases to lead to third-quarter profit declines.
September is a crucial month, when stores are generally lifted by back-to-school selling and new fall merchandise. There were same-store sales gains at some chains such as J.C. Penney Co. and Sears Merchandising Group, which have been consistently strong. However, poor results prompted Kmart Corp., Filene’s Basement Corp., TJX Cos., Cato Corp., Ross Stores and Venture Stores to issue warnings that third-quarter earnings may be lower than a year ago. Kmart’s sales strengthened from August to mid-September, though “unseasonably warm temperatures in the last three weeks of the month, compared with cooler-than-normal weather in September a year ago, hurt our apparel sales,” said Kmart chairman and chief executive Joseph Antonini, in a statement. He added that weakness in sales of apparel and mixed hard goods is putting pressure on margins, which will pull down third-quarter profits; how much, he added, depends on October trends.
Executives from The Limited Inc. and Venture saw the same sales pattern, but said October’s cooler weather is helping women’s apparel pick up.
“We hope the return of more seasonable weather will allow us to recapture some of the lost business,” said Julian Seeherman, chairman and ceo of Venture, in a statement.
Federated Department Stores Inc. chairman and ceo Allen I. Questrom, noted, “After a strong August, we saw a weakening in the business across most merchandise categories and geographic regions.” Federated posted a 2.9 percent same-store sales gain, while total sales rose 6.2 percent to $728.6 million. At Neiman Marcus Group, same-store sales were up 2.4 percent, but total sales dipped to $196 million from $197 million. Neiman Marcus and Bergdorf Goodman reported same-store sales up in the mid-single digits, but the NM Direct mail-order catalog was off slightly. Contempo Casuals was off in the mid-to-high single digits. Dayton Hudson posted a 3.3 percent comparable-store sales gain, with total sales up 9.6 percent to $1.8 billion. Continuing a string of disappointing results, Limited had a 6 percent same-store sales decline, with women’s apparel business same-store sales down in the low double digits. Sales rose 2 percent to $634.4 million. The Gap also showed a decline in same-store sales, slipping 2 percent.
At the handful of companies reporting strong same-store sales, apparel was a major contributor, particularly dresses, pantsuits and lingerie. Penney’s posted a 9.3 percent same-store sales gain, with total sales up 9.4 percent to $1.3 billion. Handbags, cosmetics, lingerie, sleepwear, push-up bras and Penney’s Arizona brand in juniors were standouts. At Sears, same-store sales rose 4.8 percent, while domestic sales rose 5.6 percent to $2.3 billion. Day-to-evening dresses, fine jewelry and cosmetics, knits, jacketed dresses, pantsuits and special sizes were strong. The best same-store sales gain, 15.9 percent, was turned in by Dollar General Corp.
Other gainers were: Wal-Mart Stores and Talbots, 6.5 percent same-store gains; Broadway Stores, 4.4 percent; Dillard Department Stores, 6 percent; May Co.’s department stores, 2.9 percent; Mercantile Stores, 4.3 percent; Target, 5 percent. Other decliners were: Clothestime, 19 percent; U.S. Shoe, 11.7 percent, and Mervyn’s, 1 percent.
— Fairchild News Service