Archive for Friday, July 9, 2004

U.S. retailers report mixed results in June

Wal-Mart blames high gasoline prices, cool weather for disappointing performance

July 9, 2004


— A slow start to summer weather and higher gasoline prices stifled business at many of the nation's big retailers last month, giving the overall industry a mixed sales performance.

As retailers reported results Thursday, the disappointments cut across industry sectors, with discounters like Wal-Mart Stores Inc., many department stores and some apparel merchants among those falling short of expectations.

However, J.C. Penney Co. Inc., Neiman Marcus Group, Inc., Saks Inc., AnnTaylor Stores Corp., and Limited Brands were among those whose sales met or beat analyst expectations.

"Everything from economic factors to weather pushed down sales," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.

Niemira's sales index for 71 retailers for June was up only 2.9 percent, the weakest performance since last June, when the index reached 2.4 percent.

Wal-Mart, the world's largest retailer, said unseasonably cool weather held sales back, but it also was struggling with the effects of rising gasoline prices. Wal-Mart Stores said sales at stores open at least a year, known as same-store sales, rose 2.2 percent in June. Analysts surveyed by Thomson First Call expected 3.6 percent.

Same-store sales are considered the best indicator of a retailer's health.

Excluding results from Wal-Mart, Niemira's tally would have been up 3.4 percent.

Target Corp. said its same-store sales rose 2.3 percent, which was below the 3.5 percent analysts predicted. Total sales were up 8.1 percent.

Limited Brands had a 19 percent increase in both same-store sales and total sales for the month. Analysts expected a 14 percent increase in same-store sales.

But Gap reported same-store sales were down 2 percent, well off the 4.1 percent gain estimated by analysts. Total sales were unchanged from a year ago.

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