PROMOTING PROFITABLY: Hills Stores Co. fourth-quarter earnings should be boosted by strong sales in January, despite the heavy promotions.
Hills reported a same-store sales increase of 16.3 percent in the four-week period ended Jan. 28, far above the 9 percent achieved by Wal-Mart Stores discount units.
Hills total sales rose 18.5 percent, which the retailer said reflected better than expected sales at three new stores.
Janet Mangano, analyst at Burnham Securities, said “the sheer volume of business” Hills did last month should soften some of the pressure promotions put on gross margins.
As a result, Mangano has raised her fourth-quarter earnings estimate for Hills from $1.80 per share to $2.17, which she said would be flat with last year’s “superb” fourth quarter.
Turning to Chapter 11: Warehouse Club Inc., the 10-unit warehouse club retailer, has filed a Chapter 11 petition seeking to reorganize.
According to court papers, filed in bankruptcy court in Chicago, Warehouse Club plans to close four unprofitable units as part of its reorganization.
The retailer, based in Skokie, Ill., has annual sales of about $225 million. Congress Financial Corp. has agreed to provide debtor-in-possession financing, including the use of cash collateral, until a court hearing to approve more permanent financing is held Feb. 13.
Warehouse Club said in court papers that it decided to file for Chapter 11 because of a general need to recapitalize after general unsecured debt became too large to service.