Reuters Business Report
Wal-Mart Sales Running at Low End of Plan
Monday August 26, 10:18 am ET
CHICAGO (Reuters) - Wal-Mart Stores Inc. (NYSE:WMT - News), the world's largest retailer, said on Monday sales at stores open at least a year were running at the low end of its 4 percent to 6 percent August growth forecast as warm weather hurt sales of fall apparel.
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Meanwhile, Federated Department Stores Inc. (NYSE:FD - News) said its sales were still running below expectations and bebe stores inc. (NasdaqNM:BEBE - News), a women's apparel chain, cut its same-store sales forecast for the September quarter.
Retail spending has been sluggish since mid-July as the U.S. economic recovery falters. Many retailers have said unusually warm weather has made customers reluctant to start buying fall clothing.
Also, U.S. government tax rebate checks issued at this time last year helped boost retail sales and set up a tough comparison for sales this August.
The August back-to-school shopping season is second in importance only to the holiday season for retailers.
Wal-Mart's weekly recorded update for sales through Aug. 23 said sales were running at the same rate as the company gave in its previous update a week ago. The August sales period for Wal-Mart runs from Aug. 3 through Aug. 30.
School supplies were among the strongest sellers. Fashion apparel sales were strong, but overall apparel sales were weak, the company said.
Same-store sales at Wal-Mart discount stores were in the 4 percent to 6 percent growth range, and membership income at Sam's Club warehouse club stores were up double digits on a percentage basis, the Bentonville, Arkansas-based company said.
BUCKING THE TREND
One retailer that has bucked the weak trend is J.C. Penney Co. Inc. (NYSE:JCP - News). The company said Monday that department store sales were running better than its expectations of flat to slightly higher same-store sales, helped by strength in back-to-school items. Fine jewelry and children's and women's apparel were the strongest performers in the latest week.
Same-store sales at its Eckerd drugstore chain were slightly below expectations of a 6 percent to 8 percent gain, the company said.
Also Monday, Federated Department Stores Inc. (NYSE:FD - News), the parent of Macy's and Bloomingdale's, said sales strengthened in the third week of August.
But same-store sales are still expected to fall even more than the company's original expectations of a 1 percent to 3 percent decline, the Cincinnati-based retailer said. Federated's August sales period runs Aug. 4 through Aug. 31.
Also, bebe stores inc. (NasdaqNM:BEBE - News), a women's apparel chain, cut its same-store sales forecast for the September quarter, saying inventory levels are down from a year ago.
The Brisbane, California-based company said it expects sales in its fiscal first quarter to be down mid- to high-single digits on a percentage basis. Bebe had previously forecast a low-single digit gain.
The company also said it expected earnings of 22 cents to 25 cents in the quarter. Analysts on average had forecast earnings of 25 cents, according to market research firm Thomson First Call.
Wal_Mart shares were down 29 cents or 0.6 percent at $52.90 in early trading on the New York Stock Exchange.
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