RETAIL STOCKS
Retail sales pace strengthens
But weekly reports do very little to boost sector shares
By Jennifer Waters, CBS.MarketWatch.com
Last Update: 10:26 AM ET Oct. 23, 2001
NEW YORK (CBS.MW) - In what could be the beginning of the end of one of the worst consumer cycles in decades, last week's chain-store sales rose for the first time since mid August, according to various surveys.
Another glimmer of hope is offered by at least one industry analyst who expects October comparable-store sales to grow by 1.5 percent - a strong rebound from last month's anemic performance.
Though customer traffic at shopping malls is still braking, the slowdown was the mildest in 25 weeks of contraction, according to the RCT's national retail traffic index.
At the same time, the weekly results from the Bank of Tokyo-Mitsubishi and UBS Warburg chain-store index shows that sales rose 0.5% last week compared to the prior week, and were higher by 1.6% over the same period last year.
A surprising wave of strength came out of the Midwest, which has been notably lagging in recent weeks. Sales also were robust in the Northeast, said Michael Niemira, BTM analyst.
Niemira noted that mall traffic picked up on a year-over-year basis between Wednesday and Friday, "which began to paint a picture that maybe the weakest point in the customer demand cycle was now behind," he said.
He believes that when the sales results are reported in early November, the industry will have improved slightly thanks to the Halloween holiday and the mere fact that fewer stores were being shuttered in October than September. Discounters - the biggest benefactors of candy and costume sales - have said that they expect a surge in buying just before Oct. 31.
Meanwhile, Instinet Redbook said retail sales were up 1.4% in the first two weeks of October.
The reports, however, did little to buoy retail shares. The sector's main yardstick stayed flat again Tuesday. And, like Monday, had more gainers, but they were little ones.
The S&P Retail Index ($RLX: news, chart, profile) was holding at 816.58.
RadioShack (RSH: news, chart, profile) was the only notable advancer, up 3.7 percent, or 98 cents, to $27.78, after reporting a profit of 27 cents a share, a penny ahead of expectations. However, those earnings were 43 percent below last year's and came with a charge of $13.5 million for layoffs.
Excluding that, RadioShack earnings $52.1 million. Same-store sales declined by 4 percent and total sales were down 5 percent to $1.08 billion from $1.14 billion.
RadioShack said, however that it expects to meet Wall Street forecasts for the fourth quarter of 66 cents a share, down from 74 cents reported last year. Comparable-store sales are projected to grow by 3 percent.
Other notable movers included Best Buy Cos. (BBY: news, chart, profile), up $1.17, or 2.2 percent, to $54.45; Pep Boys (PBY: news, chart, profile), higher by 24 cents, or 1.9 percent, to $13.05; and J.C. Penney (JCP: news, chart, profile), which added 40 cents. or 1.7 percent, to $24.40.
May Department Stores (MAY: news, chart, profile) was lower by 51 cents, or 1.6 percent, to $32, and Dillard's (DDS: news, chart, profile) was off by 13 cents, or 1 percent to $13.08.
Jennifer Waters is the Chicago bureau chief for CBS.MarketWatch.com. |
