The June retail report card shows discounters are “meeting or exceeding expectations,” while full-price department and specialty stores are “not playing well with others.”
In a month marked by continually slowing shopper activity and severe markdowns to clear inventory, Wal-Mart and Costco not unexpectedly sat comfortably in the (+) column, while Federated Department Stores, Saks Fifth Avenue, The Gap and The Limited continued to struggle.
Wal-Mart showed a 6.9 percent same-store sales increase for June 2001, and overall sales jumped 14.1 percent (though some of that is likely attributable to the increased number of stores in the chain over the past 12 months). Its June 2001 overall sales were $16 billion. Costco's same-store sales gained 5 percent. Some surprising gainers for the month included J.C. Penney (+3.8 percent in same-store sales), TJX (+2 percent) and Kmart (+1.1 percent). And Kohl's kept rolling, too, with a 1.7 percent same-store sales gain and +15.9 percent overall.
Federated's 6.4 percent same-store sales decrease was not unexpected; the retailer had warned about the poor performance a week ago. The Gap's same-store sales tumbled 7 percent, Saks was -5.2 percent and The Limited was -3 percent (not counting Galyan's and Limited Too).
Sears Roebuck's same-store sales tumbled less than 1 percent, overall sales rose less than 1 percent and that – plus a company announcement that its second-quarter earnings would surpass financial forecasts – sent its stock rising 7 percent on Thursday. Despite the charges it will take on withdrawing from its shop rollout deal with Avon, dropping out of the cosmetics business altogether and its furniture chain HomeLife ceasing operations, it said it expects earnings of 96 cents a share for the three-month period that ended June 30. Analysts were looking for 92 cents a share. In the same quarter a year ago, the company had earnings of $1.05 a share. Such are the lowered expectations in today's troubled retail climate.