Some of the country's largest retailers reported soft sales for the last week in March, and Wall Street reacted aggressively.
Federated Department Stores (Cincinnati) was downgraded from “strong buy” to “neutral” by Merrill Lynch after the retailer reported disappointing sales for the week ended Saturday, March 30, 2002. Federated also said it now expects March same-store sales to be flat to 1 percent below forecast.
Even Wal-Mart (Bentonville, Ark.) and Target (Minneapolis), traditional retail favorites of the investment community, had their ratings cut by Merrill Lynch, from “strong buy” to “buy.”
Wal-Mart said in a recorded message that sales in the week fell short of its expectations, citing winter storms and unseasonable weather as the source of the weakness. the retailer said it still expects March same-store sales to rise 8 to 10 percent.
Target also said sales for the corporation fell short of expectations last week, but that it will achieve its March goal of a same-store sales increase in the mid-single digits.
Sears Roebuck (Hoffman Estates, Ill.) and J.C. Penney (Plano, Texas) were among other retailers who reported soft sales. Sears said sales were trending below the company's plan for a decline in the low single digits. And Penney said same-store sales were lagging expectations for the month, and that it now expects same-store sales in March to come in at the low end of its forecast, which was for a rise in the high single digits. However, the retailer said sales at its Eckerd drugstore chain were strong, and on track to report a sales increase of 10 percent for March.
Most of the major U.S. retailers will report same-store sales for March's five-week period on Thursday, April 11, 2002.