Retailers report disappointing sales in January

Monday, February 11, 2002

NEW YORK -- Wal-Mart Stores Inc. and other discounters outperformed the rest of the retail industry during January as economic uncertainty again sent consumers in search of low-priced merchandise.

Retailers that reported their monthly sales Thursday also said business was hurt by winter storms in the Midwest.

Department stores, particularly May Department Stores Inc., and apparel chains, including Gap Inc., continued to struggle throughout the month, which usually is a transitional period to clear out inventory and move in spring goods.

"Americans are not yet ready to go on spending sprees and buying binges, particularly at department stores," said Kurt Barnard, president of Barnard's Retail Trend Report, based in Montclair, N.J. "They are willing to spend -- if the prices are real bargains."

The Bank of Tokyo-Mitsubishi Ltd. index measuring the sales of 72 stores rose 5.1 percent in January, better than the 3 percent projected by bank vice president Michael Niemira. The gain was the strongest monthly showing since January 2000, when the index rose 5.7 percent.

Missing from the tally was Kmart Corp., which filed for bankruptcy on Jan. 22. The chain didn't report sales Thursday but was believed to have had a 2 percent decline in sales at stores open at least one year. That would have pulled down the index by 0.4 percent, Niemira said. Kmart was expected to start filing monthly operating reports with the bankruptcy court, including sales data, starting at the end of March.

Some gains for Wal-Mart

Wal-Mart posted an 8.3 percent gain in sales at stores open at least a year, known as same-store sales. Same-store sales are considered the best indicator of a retailer's health.

Analysts polled by Thomson Financial/First Call expected Wal-Mart to report a 6.2 percent gain. Total sales for Wal-Mart were up 13.8 percent.

Costco Wholesale Corp. reported a solid 9 percent gain in same-store sales, beating Wall Street expectations for a 5.2 percent increase. Total sales were up 7 percent in January.

The Limited Inc. posted same-store sales gains of 6 percent in January. Analysts polled by Thomson Financial/First Call expected a 2.4 percent decline.

Another pleasant surprise came from JCPenney Co., which posted a 5.9 percent gain in same-store sales in its department store division. Thomson Financial/First Call expected an increase of 4.9 percent. Total sales were up 4.1 percent.

However, there were plenty of disappointments.

May Department Stores Co. saw a 10.7 drop in same-store sales, worse than what analysts expected. Total sales were down 7.2 percent.

Federated Department Stores Inc. posted an 8.8 percent decline in same-store sales. Total sales were down 25.3 percent.

Gap recorded a same-store sales drop of 16 percent, worse than the 13 percent decline that Wall Street analysts projected. Total sales were down 5 percent.

Other selected January sales figures for leading retailers:

Dollar General Corp., same-store sales up 6.4 percent; total sales up 17.3 percent.

Sears, Roebuck and Co., same-store domestic sales down 3.4 percent; total sales down 2.3 percent.

Target Corp., same-store sales up 5.8 percent; total sales up 13.5 percent.

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