NEW YORK — After the first full week of the new year, the sales outlook at many major retailers remains hauntingly similar to the way last year ended: tepid.
This story first appeared in the January 14, 2003 issue of WWD. Subscribe Today.
Wal-Mart Stores said in its weekly sales report that business for the week ended Jan. 10 was in line with plan. The world’s largest company said same-store sales were within the 3 to 5 percent increase the company had forecasted for the overall month.
Best-performing categories included intimate apparel, electronics, pet supplies, household chemicals, pharmacy products and paint. By region, the Northeast and West achieved the greatest comp increases. Internationally, the firm reported strong results in Mexico and Canada.
In a research note to investors, Bear Stearns analyst Christine Augustine wrote, “We expect U.S. comps for the month to be in the 2 to 4 percent range, including a 3 percent comp at Wal-Mart stores and a negative comp at Sam’s Club. Wal-Mart continues to reduce inventory to more manageable levels. Average ticket was down (versus the holiday season) and was dominated by basics. Average ticket and traffic trends were positive, with comps driven by traffic.”
Rival Target Corp. also reported last week’s sales performed to plan, with entertainment, toys and pharmacy revenues leading the way. Weaker merchandise categories included men’s apparel, sporting goods and shoes. Minneapolis-based Target forecasts January same-store sales at its discount stores to grow between 1 and 3 percent, with total-company comps lagging about 1 percent behind that estimate due to slower growth at the Marshall Field’s and Mervyn’s divisions.
But the mass retailers’ reasonably good news was not matched by some other stores.
At Federated Department Stores, comp-store sales for the week ended Jan. 11 led the Cincinnati-based company to report that it now expects overall January same-store sales to fall in the range of 4 to 5 percent.
As reported, last Thursday, Federated said December same-store sales fell 2.6 percent, which was better than the Wall Street forecast of a slightly greater drop of 2.8 percent.
In its weekly sales call, J.C. Penney Co. said during the first two weeks of January, comps at its stores trended below its monthly plan of flat to slightly up. Best-selling categories were children and women’s accessories.
The Plano, Tex.-based retailer said it tracked below plan due to to lower levels of clearance merchandise.
As reported, Penney’s announced a pretax charge of approximately $40 million in 2003 for additional restructuring of its catalog business.
As a result, Salomon Smith Barney analyst Deborah Weinswig in a note to investors said the firm lowered its Penney’s 2003 earnings per share estimate to $1.58 from $1.68.