Retailers release September sales reports
Melissa Levy
Star Tribune
Published Oct 12 2001
As was the case before Sept. 11, it's a good time to be a discount
retailer and not such a good time to be a high-end department
store or specialty apparel chain.
Last month, consumers stayed away from stores in the
immediate aftermath of the terrorist attacks, but returned to
recent buying habits at the end of September, retailers said in
sales reports released Thursday.
Value-oriented chains such as Target and Kohl's posted gains
at stores open at least a year, while same-store sales declined at
such retailers as Federated Department Stores Inc. and Gap
Inc. (Same-store sales are considered a key indicator of a
retailer's health.)
The divide between discounters and more upscale retailers
widened as the economy weakened this year. Shoppers became
bargain hunters in light of increased layoffs and a volatile stock
market.
"Even before Sept. 11, retail sales would have been mediocre at
best. The attacks worsened the economic situation," said Kurt
Barnard, president of the Retail Trend Report in Upper
Montclair, N.J.
"Consumers are going back to shopping, regaining some sense of
normalcy," he said. "If there should be another terrorist attack
in the U.S., all bets are off."
Among local retailers, September same-store sales at
Minneapolis-based Target Corp. increased 0.2 percent. The
retailer had forecast a low-single-digit increase for the month.
The Target discount chain posted a 1.3 percent same-store
sales gain last month, in line with expectations. Sales increased
1.9 percent at Marshall Field's. The department stores bucked
the national trend, as shoppers in Minnesota and Michigan used
incentive coupons mailed with their new Field's charge card --
part of the retailer's rebranding campaign.
Mervyn's, a mid-priced chain, reported an 8.7 percent
same-store sales decline.
Overall, Target's total monthly sales increased 7.4 percent to
nearly $3.3 billion.
"Sales for the corporation were below plan in September,
particularly in the second week," which included Sept. 11,
Target Chairman and CEO Bob Ulrich said in a prepared
statement. "Profit trends remain very good at Target Stores,
and are somewhat weak at Mervyn's and Marshall Field's."
The company said it expects third-quarter earnings per share
of 24 to 25 cents, compared with 24 cents last year. A Thomson
Financial/First Call analysts survey had forecast a 25 cents a
share profit for the quarter ended Nov. 3. Target will report
results Nov. 20.
Target shares closed Thursday at $33.05, up 74 cents.
Brooklyn Park-based Wilsons The Leather Experts Inc. -- a
chain with many airport locations -- said September
same-store sales decreased 22.3 percent. Total sales were $48.2
million, down 28 percent.
"While September results were poor, we have seen an
improvement in our sales trends over the last two weeks, which
we expect will continue," Chairman and CEO Joel Waller said
in a prepared statement.
The company, which saw a 31 percent same-store sales decline
the week of the attacks, plans to scale back its advertising and
store expansion plans for next year. It had planned to open
about 100 units in 2002, similar to this year's level.
Wilsons' shares fell 10 cents $9.15.
September same-store sales at value-focused Kohl's Corp. rose
4 percent. The Menomonee Falls, Wis.-based retailer recorded
total sales of $623 million, up 20.2 percent.
Kohl's expects to open 24 stores in October, including one in
Shakopee. Its stock rose $3.71 to $55.46.
Eden Prairie-based Best Buy Co. Inc. reports sales on a
quarterly, not monthly, basis. But the nation's largest consumer
electronics retailer said Thursday in a Securities and Exchange
Commission filing that its fiscal third-quarter profit will be
about 34 cents a share, at the "lower end of the range" of
expections. Its quarterly same-store sales are expected to be flat
to down 2 percent. Best Buy will report third-quarter results
Dec. 18.
Best Buy shares rose $3.05 to $53.95, a gain of nearly 6 percent.
Analysts and retail executives said they remain wary about the
holiday season, given the uncertain economic and political
environment.
Jeffrey Feiner, managing director of Lehman Brothers, said his
company's retail index, which tracks 22 companies, registered
its lowest September reading -- a 1.4 percent gain -- in its
20-year history.
He said he is halving his holiday forecasts to a 2 percent gain,
and is reducing earnings estimates on more than a dozen
retailers.
Wal-Mart, the nation's largest retailer, reported a robust 6.3
percent same-store sales gain. Analysts had expected a gain of
4 to 6 percent.
Kmart Corp. said same-store sales in September were
unchanged from a year ago and in line with expectations.
Federated Department Stores, the parent of Minnetonka-based
Fingerhut Companies Inc., reported a 12.9 percent slide in
same-store sales, although it said business improved toward the
end of the month. While the company said it is difficult to
forecast sales, it believes same-store sales for October will be
down 7 to 10 percent.
-- The Associated Press and Bloomberg News contributed to
this report.
-- Melissa Levy is at mlevy@startribune.com .
© Copyright 2001 Star Tribune. All rights reserved. |
