NEW YORK — Apparel sales missed the back-to-school boat again last week, even at Wal-Mart Stores.
This story first appeared in the August 27, 2002 issue of WWD. Subscribe Today.
Wal-Mart said its comparable-store sales through Saturday stood at the low end of its planned 4 to 6 percent uptick for the month. The flagship division also continued to comp up in the 4 to 6 percent range for the week. Wal-Mart’s four-week fiscal month ends on Friday.
“Back-to-school sell-through is on plan for school supplies,” said a spokeswoman on a recorded call. “Sales in fashion apparel are strong, but apparel overall is below plan for the period due to unseasonably warm weather.”
A spokesman told WWD of b-t-s, “The season is spread out a lot further than it used to be. People are buying closer to the need and with the weather some of the apparel sales tied to back-to-school have not come on as strongly.”
Despite continued weakness in soft-goods sales, the Standard & Poor’s retail index rose 1.93 points, or 0.7 percent, to 300.46. This increase fell behind the S&P 500, which rose 7.09 points, or 0.8 percent, to 947.95, but beat out the Dow Jones Industrial Average, which was up 46.05 points, or 0.5 percent to 8,919.01.
Among the retailers getting a lift in their share prices were J.C. Penney Co., which provided the only sunny sales news of the day, up 66 cents, or 3.9 percent, to $17.71; Federated Department Stores Inc., 38 cents, or 1.1 percent, to $36.46; Sears, Roebuck & Co., 38 cents, or 0.8 percent, to $47.21, and Wal-Mart Stores Inc., 21 cents, or 0.4 percent, to $53.40. Target Corp. shares dropped 11 cents, or 0.3 percent, to $35.79.
Strength in Wal-Mart’s international business came from the United Kingdom, Canada and Mexico. B-t-s in each of these countries ran above plan.
Wal-Mart’s July-August comps will apparently turn in the worst bi-monthly same-store sales performance for the firm since its 3.9 percent uptick during February-March 2001, noted Moody’s Investors Service economist John Lonski.
The February-March 2001 period coincides with the start of the last recession, though Lonski doesn’t see a return to comps of that level for Wal-Mart as a sign of looming recession.
“Consumer incomes are not growing rapidly enough to support a broad-based acceleration of consumption,” said the economist. Retail chains, therefore, are ceding some growth to bars and restaurants as well as to auto and home sales.
“Consumer spending is uninspiring. At best, it’s growing modestly. It is simply not contracting in a manner that would support forecasts of a double-dip recession,” he said.
Target, which expects a 2 to 4 percent comp increase in its discount stores and a slightly lower rise overall, said its comps for the week were below plan.
Federated, on its Web site, noted comps last week were “a little bit stronger” than they had been, but not enough for the firm to meet its prior guidance of a 1 to 3 percent decrease for August.
Sears said same-store sales for the first three weeks of August continued below its expectations for a high-single-digit decline. The strongest merchandise categories in its full-line stores were home electronics, hardware and junior apparel. The retailer maintains, though, that it’s on track for a low- to mid-single-digit same-store sales decline for the year.
Continuing to swim against the tide was J.C. Penney, which through the fourth and final week of its fiscal month, is ahead of planned increases of a flat to slightly positive comp result in its department stores.
“Sales for the fourth week continued to perform well, especially back-to-school merchandise,” noted a spokesman on a recorded call. “The best categories for the week were fine jewelry, children’s and women’s apparel.”