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Struggling Walmart Focuses On Increasing Sales At Existing Stores

by on April 26, 2011

Huffington Post…

(Jessica Wohl) Wal-Mart Stores Inc (WMT.N) is making progress bringing items and shoppers back to its U.S. stores, and turning around U.S. sales remains its top priority, President and Chief Executive Mike Duke said on Tuesday. The Walmart U.S. discount chain’s food department has improved and its general merchandise areas are well on the way to having the right assortment, Duke said at a Barclays conference in New York that was also broadcast over the Internet. Duke also said that there is a “tremendous long-term opportunity” in sub-Saharan Africa. Wal-Mart’s plan to buy 51 percent of South Africa’s Massmart Holdings Ltd (MSMJ.J) has been hung up by delays. The government approval process should be completed over the next few weeks, allowing Wal-Mart to move ahead with the deal, Duke said. Wal-Mart is bringing back thousands of items, advertising its low price guarantee and taking other steps to try to win back shoppers who balked at an earlier plan that cut goods from stores and emphasized promotional prices. Duke again said that achieving an increase in U.S. same-store sales — a key gauge of retail health that measures sales at stores open at least a year — is his “first priority.” Walmart U.S., the largest part of the world’s biggest retailer, has reported seven consecutive quarterly declines. Duke declined to say when those same-store sales should turn around, but he did say that he is seeing “traction.” Wal-Mart’s biggest growth opportunity remains the United States, where it is opening more supercenters and other types of stores, followed by the potential to expand in China, he said. (Reporting by Jessica Wohl) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Struggling Walmart Focuses On Increasing Sales At Existing Stores

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Best Buy’s Smartphone Sales Offset Weak Demand For Televisions

by on March 24, 2011

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By Dhanya Skariachan NEW YORK – Best Buy Co Inc beat quarterly profit estimates as strength in its mobile business offset weak demand for televisions and entertainment software in the all-important holiday season. But analysts were cautious about the longer term outlook for the company. The top U.S. consumer electronics chain, which recently announced plans to open about 150 Best Buy Mobile small-format stores in the United States, saw a low double-digit comparable store sales increase in mobile phones even as overall comparable-store sales fell in the fourth quarter. The retailer is focusing on selling more mobile phone, broadband and TV connections rather than expensive televisions as post-recession U.S. shoppers keep a tight rein on spending amid rising gas prices and high unemployment levels. Despite the big focus on its profitable mobile business, many raised concerns about Best Buy’s long term prospects citing continuing pressure on its ailing TV business. “It is very difficult for Best Buy to post positive comps when a category that is 20 percent of their sales is comping down double digits,” BB&T Capital Markets analyst Anthony Chukumba said. Net income fell to $651 million, or $1.62 a share in the fourth quarter ended February 26, from $779 million, or $1.82 a share, a year earlier. Excluding items, it earned $1.98 a share, well ahead the analysts’ average estimate of $1.85 a share, according to Thomson Reuters I/B/E/S. (For a related graphic, click: r.reuters.com/kax68r) Best Buy shares were down 7 cents at $31.78, reversing course after being up 3 percent earlier on Thursday morning on the New York Stock Exchange. “The stock appears to be getting a ‘better than feared’ reaction,” JPMorgan analyst Christopher Horvers said. “Given the lack of sales visibility and little reason to be optimistic before easy back-half comparisons, the arrival of more competitive tablets, and a labor market rebound, there isn’t much else to hold on to for the next two quarters that can put a significant dent in the secular bear case.” Best Buy has consistently lost bargain-hungry shoppers to online retailer Amazon.com Inc and mass merchants Target Corp and Wal-Mart Stores Inc. “Best Buy should see some near-term relief from the concerns circling the name,” Stifel Nicolaus analyst David Schick said. “The problems re-emerge, though, as the longer-term view is taken.” For fiscal 2012, the company sees earnings of $3.30 to $3.55 a share, excluding previously announced restructuring charges and potential share repurchases. The outlook compared with Horvers’ estimate of $3.44 and consensus of $3.57. On Thursday, GameStop Corp, the world’s largest retailer of video game products, also posted a higher-than-expected quarterly profit. Best Buy’s decision to focus on promoting pricier televisions backfired in the early part of the holiday season. The retailer advertised cheaper TVs later in the season, but its December same-store sales still fell 4 percent. Same-store sales fell 4.6 percent in its fourth quarter, including a 5.5 percent decline at its U.S. stores open at least 14 months. Wedbush analyst Michael Pachter was looking for a 2.2 percent same-store sales decline in the quarter, including a 3 percent decline at its U.S. stores open at least 14 months. (Editing by Dave Zimmerman) Copyright 2011 Thomson Reuters. Click for Restrictions

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Best Buy’s Smartphone Sales Offset Weak Demand For Televisions

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Wal-Mart Profit Rises But U.S. Sales Weak

August 17, 2010

NEW YORK — Wal-Mart Stores Inc. reported a 3.6 percent increase in second-quarter net income and raised its earnings guidance for the full year as it benefits from cost-cutting and robust global growth in China, Brazil and Mexico. But a closely watched measure of revenue fell more than expected, dragged down by its U.S. Walmart division, as its main customers have felt the biggest impact of the economy’s woes. The discounter said Tuesday it had net income of $3.59 billion, or 97 cents per share, for the period ended July 31. That compares with $3.47 billion, or 89 cents per share, a year ago. Revenue rose almost 3 percent to $103.7 billion. Revenue at stores open at least a year fell 1.4 percent, worse than the 0.26 percent expected by Thomson Reuters. At Wal-Mart’s namesake stores, that measure fell 1.8 percent while at Sam’s Clubs, the measure was up 1 percent. The 1.4 percent decline in revenue at stores open at least a year marked the fifth straght quarterly drop. The measure is a key indicator of a retailer’s health. Shares rose 39 cents to $50.80 in premarket trading. Analysts had expected earnings per share of 96 cents on revenue of $105.3 billion. “We continue to focus on our priorities of growth, leverage and return,” said Mike Duke, Wal-Mart Stores Inc.’s president and CEO, said in a statement. “The slow economic recovery will continue to affect our customers, and we expect they will remain cautious about spending.” As a testament to customers’ tepid spending, shoppers are buying back-to-school items closer to the school year’s start, officials said during a prerecorded conference call. Wal-Mart benefited during the recession as affluent shoppers traded down to cheaper stores. But it acknowledged in May that it’s losing some of those customers, who’ve started to trade back up. Meanwhile, stubbornly high unemployment and tight credit are still squeezing its main lower-income customers, who are having more trouble stretching their dollars to the next payday. Wal-Mart’s strategy to turn around business at its weak U.S. namesake stores remains in flux amid executive departures and reshuffling. Bill Simon, formerly chief operating officer, took over Eduardo Castro-Wright’s job as president and CEO of the company’s U.S. operations in June. Castro-Wright now leads the retailer’s e-commerce unit Global.com and its global sourcing division. He will remain vice chairman of the company. The company is also now seeking a replacement for chief merchant John Fleming, who left Aug. 1 and played a big role in shaping what was on store shelves. Duke said during the pre-recorded call that Wal-Mart’s top priority in its U.S business is to improve sales and traffic, and he expects assortments to be “more relevant” to customers in the coming months. At Walmart stores, discretionary items like clothing and home goods, dragged down by weak business in grills, lawnmowers and patio furniture, declined, according to Simon. And the company’s steep price rollbacks in May and June didn’t generate the sales that it expected. Wal-Mart has said its own strategies are partly to blame for its weak U.S. business. Wal-Mart has acknowledged in recent months that its campaign to declutter its stores went too far, leading shoppers to flee to rivals such as Target Copr. for favorite brands. It has been scrambling to restock some products over the past year. The company is also focusing on basics such as socks and underwear after pushing trendy fashions and home furnishings, a strategy that didn’t fare well. That includes returning merchandise displayed on pallets in the aisles as promotions, which it calls “action alley” merchandise, in the past six weeks. As part of its campaign to declutter stores, the company had eliminated the pallets. In a shift in strategy, Wal-Mart appears to have abandoned efforts to court more affluent shoppers, except for in electronics, David Schick, a retail analyst at Stifel Nicolaus, wrote in a recent note. But Wal-Mart’s profits remain robust, helped by its international business and its focus to cut costs. Wal-Mart’s international business, which accounts for about 25 percent of its revenue, rose almost 16 percent to $25.9 billion, while Walmart store revenue in the U.S. rose a meager 0.6 percent to $64.6 billion. Sam’s Club’s revenue was up 3.4 percent to $12.46 billion. Wal-Mart says it now expects it will earn between $3.95 and $4.05 per share for the year. That’s up from $3.90 to $4. Analysts surveyed by Thomson Reuters expect $3.99 per share. For the third quarter, Wal-Mart expects revenue at stores open at least a year to range from a declne of 2 percent to an increase of 1 percent. That compares wth a 0.5 percent decline in the same period last year.

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Wal-Mart Profit Rises But U.S. Sales Weak

August 17, 2010

NEW YORK — Wal-Mart Stores Inc. reported a 3.6 percent increase in second-quarter net income and raised its earnings guidance for the full year as it benefits from cost-cutting and robust global growth in China, Brazil and Mexico. But a closely watched measure of revenue fell more than expected, dragged down by its U.S. Walmart division, as its main customers have felt the biggest impact of the economy’s woes. The discounter said Tuesday it had net income of $3.59 billion, or 97 cents per share, for the period ended July 31. That compares with $3.47 billion, or 89 cents per share, a year ago. Revenue rose almost 3 percent to $103.7 billion. Revenue at stores open at least a year fell 1.4 percent, worse than the 0.26 percent expected by Thomson Reuters. At Wal-Mart’s namesake stores, that measure fell 1.8 percent while at Sam’s Clubs, the measure was up 1 percent. The 1.4 percent decline in revenue at stores open at least a year marked the fifth straght quarterly drop. The measure is a key indicator of a retailer’s health. Shares rose 39 cents to $50.80 in premarket trading. Analysts had expected earnings per share of 96 cents on revenue of $105.3 billion. “We continue to focus on our priorities of growth, leverage and return,” said Mike Duke, Wal-Mart Stores Inc.’s president and CEO, said in a statement. “The slow economic recovery will continue to affect our customers, and we expect they will remain cautious about spending.” As a testament to customers’ tepid spending, shoppers are buying back-to-school items closer to the school year’s start, officials said during a prerecorded conference call. Wal-Mart benefited during the recession as affluent shoppers traded down to cheaper stores. But it acknowledged in May that it’s losing some of those customers, who’ve started to trade back up. Meanwhile, stubbornly high unemployment and tight credit are still squeezing its main lower-income customers, who are having more trouble stretching their dollars to the next payday. Wal-Mart’s strategy to turn around business at its weak U.S. namesake stores remains in flux amid executive departures and reshuffling. Bill Simon, formerly chief operating officer, took over Eduardo Castro-Wright’s job as president and CEO of the company’s U.S. operations in June. Castro-Wright now leads the retailer’s e-commerce unit Global.com and its global sourcing division. He will remain vice chairman of the company. The company is also now seeking a replacement for chief merchant John Fleming, who left Aug. 1 and played a big role in shaping what was on store shelves. Duke said during the pre-recorded call that Wal-Mart’s top priority in its U.S business is to improve sales and traffic, and he expects assortments to be “more relevant” to customers in the coming months. At Walmart stores, discretionary items like clothing and home goods, dragged down by weak business in grills, lawnmowers and patio furniture, declined, according to Simon. And the company’s steep price rollbacks in May and June didn’t generate the sales that it expected. Wal-Mart has said its own strategies are partly to blame for its weak U.S. business. Wal-Mart has acknowledged in recent months that its campaign to declutter its stores went too far, leading shoppers to flee to rivals such as Target Copr. for favorite brands. It has been scrambling to restock some products over the past year. The company is also focusing on basics such as socks and underwear after pushing trendy fashions and home furnishings, a strategy that didn’t fare well. That includes returning merchandise displayed on pallets in the aisles as promotions, which it calls “action alley” merchandise, in the past six weeks. As part of its campaign to declutter stores, the company had eliminated the pallets. In a shift in strategy, Wal-Mart appears to have abandoned efforts to court more affluent shoppers, except for in electronics, David Schick, a retail analyst at Stifel Nicolaus, wrote in a recent note. But Wal-Mart’s profits remain robust, helped by its international business and its focus to cut costs. Wal-Mart’s international business, which accounts for about 25 percent of its revenue, rose almost 16 percent to $25.9 billion, while Walmart store revenue in the U.S. rose a meager 0.6 percent to $64.6 billion. Sam’s Club’s revenue was up 3.4 percent to $12.46 billion. Wal-Mart says it now expects it will earn between $3.95 and $4.05 per share for the year. That’s up from $3.90 to $4. Analysts surveyed by Thomson Reuters expect $3.99 per share. For the third quarter, Wal-Mart expects revenue at stores open at least a year to range from a declne of 2 percent to an increase of 1 percent. That compares wth a 0.5 percent decline in the same period last year.

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McDonald’s Sales Post Largest Gain In Over A Year

August 9, 2010

CHICAGO — McDonald’s Corp. posted its biggest monthly increase of a key U.S. sales figure in more than a year on Monday, saying its new fruit smoothies and frappes were a hit with customers during a hot and steamy July. In the U.S., sales at restaurants open at least 13 months climbed 5.7 percent – its biggest monthly increase since it recorded a 6.1 percent gain in April 2009. Overall, the measure rose 7 percent around the globe. It climbed 5.3 percent in Europe and 10.1 percent in the rest of the world, the world’s largest hamburger chain said in a statement on Monday. The figure is considered an important gauge of a restaurant chain’s performance because it excludes the effects of restaurants that open or close during the year. McDonald’s shares climbed 67 cents to $72.41 in pre-market trading Monday. The company’s stock closed Friday at $71.74. McDonald’s is based in the Chicago suburb of Oak Brook, Ill. It has more than 32,000 restaurants around the world in 100 countries. About 14,000 of its locations are in the U.S. ___ AP Retail Writer Mae Anderson contributed to this report from New York.

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Wal-Mart Profit Tops Analysts’ Estimates; U.S. Sales Miss Company Forecast

May 18, 2010

By Chris Burritt May 18 (Bloomberg) — Wal-Mart Stores Inc. , the world’s largest retailer, reported first-quarter earnings that exceeded analysts’ estimates. U.S. sales missed the retailer’s forecast. Earnings for the quarter were 88 cents, topping the 85 cent average of 21 analysts’ estimates compiled by Bloomberg. Sales at U.S. Wal-Mart stores open at least a year declined 1.4 percent after the company projected they would be up or down as much as 1 percent, according to a statement today. Wal-Mart said customers are still concerned about personal finances and unemployment. The Bentonville, Arkansas-based retailer reduced prices on gas grills, lawn mowers and Procter & Gamble Co.’s Crest toothpaste and Bounty paper towels. Wal-Mart gained 20 cents to $52.93 in early trading . The shares had slipped 1.3 percent this year before today on the New York Stock Exchange. Price reductions, called “rollbacks,” are aimed at driving comparable-store sales, Bill Simon , chief operating officer for U.S. stores, told analysts March 10. The U.S. jobless rate rose to 9.9 percent in April from 9.7 percent a month earlier as thousands of jobseekers entered the workforce, according to a May 7 U.S. Labor Department report. (Wal-Mart executives discuss financial results on a recorded call. To listen, call +1-800-778-6902.) To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net .

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Wal-Mart Profit Tops Analysts’ Estimates; U.S. Sales Miss Company Forecast

May 18, 2010

By Chris Burritt May 18 (Bloomberg) — Wal-Mart Stores Inc. , the world’s largest retailer, reported first-quarter earnings that exceeded analysts’ estimates. U.S. sales missed the retailer’s forecast. Earnings for the quarter were 88 cents, topping the 85 cent average of 21 analysts’ estimates compiled by Bloomberg. Sales at U.S. Wal-Mart stores open at least a year declined 1.4 percent after the company projected they would be up or down as much as 1 percent, according to a statement today. Wal-Mart said customers are still concerned about personal finances and unemployment. The Bentonville, Arkansas-based retailer reduced prices on gas grills, lawn mowers and Procter & Gamble Co.’s Crest toothpaste and Bounty paper towels. Wal-Mart gained 20 cents to $52.93 in early trading . The shares had slipped 1.3 percent this year before today on the New York Stock Exchange. Price reductions, called “rollbacks,” are aimed at driving comparable-store sales, Bill Simon , chief operating officer for U.S. stores, told analysts March 10. The U.S. jobless rate rose to 9.9 percent in April from 9.7 percent a month earlier as thousands of jobseekers entered the workforce, according to a May 7 U.S. Labor Department report. (Wal-Mart executives discuss financial results on a recorded call. To listen, call +1-800-778-6902.) To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net .

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J.C. Penney Profit Doubles on Promotions for Families; Year Outlook Raised

May 14, 2010

By Lauren Coleman-Lochner May 14 (Bloomberg) — J.C. Penney Co. , the U.S. department- store chain, raised its annual earnings forecast and posted its first quarterly profit increase in almost three years, helped by promotions aimed at families. Net income more than doubled to $60 million, or 25 cents a share, in the first quarter ended May 1 from $25 million, or 11 cents, a year earlier, the Plano, Texas-based company said today in a statement. Analysts predicted 25 cents, on average, according to estimates compiled by Bloomberg. The chain raised its annual profit forecast to $1.64 a share from $1.55. Analysts predicted $1.66. J.C. Penney plans to expand its market share this year, selling Liz Claiborne and MNG by Mango products in the fall. U.S. retailers are seeing consumers return to spending amid the economic recovery, with sales at stores open at least a year climbing in each of the past three months, according to the International Council of Shopping Centers, a New York-based industry group. Revenue rose 1.2 percent to $3.93 billion, J.C. Penney said May 6. Same-store sales rose 1.3 percent. J.C. Penney dropped $1.46, or 4.9 percent, to $28.17 yesterday in New York Stock Exchange composite trading . The shares have gained 5.9 percent this year. To contact the reporter on this story: Lauren Coleman-Lochner at llochner@bloomberg.net .

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Macy’s Reports First-Quarter Profit as Sales Gain, Maintains 2010 Forecast

May 12, 2010

By Cotten Timberlake May 12 (Bloomberg) — Macy’s Inc. , the second-biggest U.S. department-store chain, reported a profit in the first quarter after sales accelerated and maintained its earnings forecast for the year, citing economic uncertainty. Net income totaled $23 million, or 5 cents a share, in the three months ended May 1, compared with a net loss of $88 million, or 21 cents, a year earlier, the Cincinnati-based company said today in a statement. Analysts estimated profit of 4 cents, the average of 11 predictions compiled by Bloomberg. The retailer increased its annual earnings forecast on April 27, after its strategy to tailor to local tastes and an improved U.S. economy lifted sales. Macy’s said today it’s premature to raise its guidance further. “Management seems to be in this camp that unemployment levels remain relatively high and there certainly seems to be uncertainty in the financial markets,” said Liz Dunn , a New York-based analyst with Thomas Weisel Partners LLC, who rates the stock “overweight.” “They do, though, seem to be expressing that they feel good about their business and that their strategies have resulted in them turning the corner.” Macy’s rose 74 cents, or 3.1 percent, to $24.64 at 9:35 a.m. in New York Stock Exchange composite trading. The shares had jumped 43 percent this year before today. Last month, Macy’s raised its forecast for annual earnings to $1.75 to $1.80 a share. Analysts estimate $1.88, the average of predictions compiled by Bloomberg. The retailer also said at the time that sales at stores open at least a year would climb 3 percent to 3.5 percent, compared with an earlier projection for a maximum gain of 2 percent. First-quarter revenue rose 7.2 percent to $5.57 billion, and same-store sales gained 5.5 percent, Macy’s said. To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

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Wal-Mart Quarterly Sales Trail Forecast on Grocery, Electronics Price Cuts

February 18, 2010

By Chris Burritt Feb. 18 (Bloomberg) — Wal-Mart Stores Inc. , the world’s largest retailer, reported fourth-quarter comparable-store sales that trailed its projection after cutting prices on groceries and electronics. The company’s full-year forecast fell short of some analysts’ estimates. Sales by U.S. stores open at least a year fell 1.6 percent, the Bentonville, Arkansas-based company said today in a statement. Wal-Mart had projected sales to decline no more than 1 percent. U.S. sales will be “more challenging” in the first quarter, Chief Executive Officer Mike Duke said. “We remain focused on growing top-line sales and expect improvement in the United States as the year progresses,” Duke said in the statement. For the full year, earnings from continuing operations will be $3.90 to $4 a share, compared with an average analyst estimate of $3.98. During the holiday season, the retailer reduced prices on laptop computers, along with turkeys and cranberry sauce for holiday meals, as job losses crimped demand. Wal-Mart dropped $1.17 to $52.89 at 8 a.m., before U.S. markets opened, from a close of $54.06 in New York Stock Exchange composite trading yesterday. Net income in the fourth quarter ended Jan. 31 increased 22 percent to $4.63 billion, or $1.21 a share, from $3.79 billion, or 96 cents, a year earlier. Excluding a tax benefit and a restructuring charge, profit totaled $1.17 a share. Revenue advanced 4.5 percent to $113.7 billion. “The sales did come in soft and the comps are a little disappointing,’ Colin McGranahan , an analyst at Sanford C. Bernstein & Co. in New York, said today in a Bloomberg Television interview. He rates Wal-Mart as “market-perform.” “That’s what propelling the stock on first trade.” Wal-Mart predicted first-quarter profit of 81 cents to 85 cents. Analysts on average anticipate 85 cents. The retailer forecast first-quarter comparable-store sales in the U.S. to be unchanged, plus or minus 1 percent. (A recording of Wal-Mart executives discussing financial results can be heard at +1-800-778-6902.) To contact the reporter on this story: Chris Burritt in Greensboro, North Carolina, at cburritt@bloomberg.net

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McDonald’s Worldwide January Sales Rise 2.6%, Topping Analysts’ Estimates

February 9, 2010

By Courtney Dentch Feb. 9 (Bloomberg) — McDonald’s Corp ., the world’s largest restaurant company, said global sales rose 2.6 percent in January, topping some analysts’ estimates, as demand in Asia and the U.K. countered a decline the in U.S. Sales at U.S. stores open at least 13 months fell 0.7 percent and climbed 4.3 percent in Europe, the Oak Brook, Illinois-based company said today in a statement. Sales in Asia, the Middle East and Africa also rose 4.3 percent. McDonald’s introduced a $1 breakfast menu in January and added a wrap version of its Big Mac sandwich to revive U.S. sales hurt by a slowdown in consumer spending and poor weather in the first half of the month. Longer opening hours in the U.K. and France drove sales in those markets, and demand for breakfast and staples such as french fries added to sales in Australia and Japan. “Underlying trends, excluding weather, improved from December, helped by the successful launches of newer initiatives,” David Tarantino , an analyst with Robert W. Baird & Co. wrote in a note today. He rates the stock “outperform.” McDonald’s rose 21 cents to $63.13 at 10:08 a.m. in New York Stock Exchange composite trading. The shares gained less than 1 percent last year. Global sales were predicted to rise 2 percent, the average of estimates from analysts at Barclays Capital, Jefferies & Co. and Robert W. Baird. U.S. sales were projected to be unchanged. The analysts projected gains of 4 percent in Europe and 1.3 percent in Asia, the Middle East and Africa. McDonald’s also said the closure of about 430 restaurants in Japan over the next 12 to 18 months will cost about $40 million to $50 million after taxes, primarily in the first half. To contact the reporter on this story: Courtney Dentch in New York at cdentch1@bloomberg.net .

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Staples Net Tops Estimates as North American Retail Customer Traffic Grows

December 1, 2009

By Mark Clothier Dec. 1 (Bloomberg) — Staples Inc. , the world’s largest office-supply retailer, reported third-quarter earnings that topped analysts’ estimates as North American customer visits increased for the first time in nine quarters. Earnings, excluding the cost of integrating an acquisition, totaled 39 cents a share, Framingham, Massachusetts-based Staples said today in a statement. Analysts had projected 38 cents, the average of estimates compiled by Bloomberg. North American retail revenue, accounting for 40 percent of all sales , increased 1 percent, and sales at stores open at least 12 months were unchanged. North American delivery revenue declined 11 percent as existing customers spent less. “They’re clearly seeing good progress in retail,” Colin McGranahan , an analyst at Sanford C. Bernstein & Co. in New York, said in an interview. McGranahan estimated sales in older stores would fall 3.5 percent. Net income rose to $269.4 million, or 37 cents a share, from $156.7 million, or 22 cents, a year earlier, the company said. Sales fell 6.2 percent to $6.52 billion in the 13 weeks ended Oct. 31, beating estimates. The cost of integrating Corporate Express NV, a Dutch office-supply distributor acquired in 2008, fell, bolstering net income. The company forecast fourth-quarter earnings of 36 cents to 38 cents a share, excluding restructuring costs, as it realizes savings from the purchase. Analysts estimated 37 cents on that basis, on average. Staples added $1.05, or 4.5 percent, to $24.37 at 8:11 a.m. New York time, before U.S. markets opened. The shares were unchanged at $23.32 yesterday in Nasdaq Stock Market trading . The shares have gained 30 percent this year. To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

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Saks, Target Remain `Cautious’ on Demand After Earnings Exceed Estimates

November 17, 2009

By Cotten Timberlake and Lauren Coleman-Lochner Nov. 17 (Bloomberg) — Saks Inc. , the U.S. luxury retail chain, and Target Corp. , the second-largest discount chain, said they remain cautious about demand after reporting third-quarter earnings that beat analysts’ estimates. New York-based Saks reported today an unexpected profit of 1 cent a share in the period ended Oct. 31, its first in more than a year, after reducing inventories and expenses to counter a sales decline. Target said average transaction sizes shrank in November and fourth-quarter comparable-store sales may fall after third-quarter earnings rose more than analysts projected. “Generally, retailers are beating profit estimates on cost cuts,” David Abella , a portfolio manager with Rochdale Investment Management LLC in New York, said in a telephone interview today. “The sales outlook is still tough for the fourth quarter, but there is at least some hope that they are slowly improving.” Abella helps manage $2.5 billion in assets, including Target and TJX Cos. shares. The rate of sales declines is abating at Saks and Dillard’s Inc. , the Little Rock, Arkansas-based department-store chain, after the highest unemployment rate in 26 years and falling home values crimped consumer spending. Target, based in Minneapolis, said today it remains cautious about the current quarter and expects a “highly promotional” holiday season. November sales “provide additional justification for being cautious in this uncertain environment,” Chairman and Chief Executive Officer Gregg Steinhafel said on a conference call. TJX Earnings TJX , the owner of the T.J. Maxx and Marshalls clothing- store chains, said today that third-quarter profit rose on higher sales and increases in customer traffic. It raised its fourth-quarter earnings forecast to as much as 71 cents a share, matching the average analysts’ estimate in a Bloomberg survey. Saks rose 26 cents, or 4.1 percent, to $6.67 at 4 p.m. in New York Stock Exchange composite trading. The shares have gained 52 percent this year. Target fell $1.52, or 3 percent, to $48.77. TJX dropped 61 cents to $38.91, while Dillard’s jumped 8.9 percent to $14.51. Saks’ third-quarter income of $1.93 million compared with a loss of $43.7 million, or 32 cents, a year earlier. Analysts predicted a loss of 11 cents a share, the average of nine estimates compiled by Bloomberg. The retailer cut inventories by 21 percent during the third quarter and reduced selling, general and administrative expenses by 10 percent to $162.6 million. Charles Grom , an analyst with JPMorgan Chase & Co. in New York, estimated those expenses at $172.1 million. He rates the shares “neutral.” Saks ‘Cautious’ Saks’ sales at stores open at least a year dropped 10 percent. The retailer reduced its forecast for those sales to a decline in the “high-single digits” in percentage terms for the second half, from a drop of “mid-to-high single digits.” Saks said in a statement it is “cautious about the environment” for next year. “The current economic and retail environment remain uncertain,” Saks Chairman and Chief Executive Officer Stephen Sadove said on a conference call with investors and analysts. “It’s a fragile period for everyone in this industry.” At Target, third-quarter net income advanced to $436 million, or 58 cents a share, from $369 million, or 49 cents, a year earlier. Analysts anticipated earnings of 50 cents a share, the average of estimates in a Bloomberg survey. Sales at stores open at least a year declined 1.6 percent, in line with figures Target provided on Nov. 5. TJX, Dillard’s At Framingham, Massachusetts-based TJX, net income climbed 47 percent to $347.8 million, or 81 cents a share, from $235.8 million, or 54 cents, a year earlier. Sales rose 10 percent to $5.24 billion. Analysts predicted profit of 78 cents and sales of $5.18 billion, the average of estimates in a Bloomberg survey. Dillard’s swung to a profit of $8 million in the period from a loss of $56 million a year earlier, according to a statement today. Excluding a tax benefit, it was a loss of 3 cents a share, beating analysts’ average projection for a 51- cent loss. Dillard’s trimmed inventory and reduced expenses in the quarter, expanding its gross margin by 420 basis points. Total revenue declined 9.9 percent to $1.36 billion, in line with analysts’ estimates. To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

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Home Depot’s Second-Quarter Profit Falls Less Than Estimated; Sales Drop

August 18, 2009

By Mark Clothier Aug. 18 (Bloomberg) — Home Depot Inc. , the largest home- improvement retailer, reported second-quarter profit that fell less than analysts estimated and increased its full-year earnings forecast. Net income dropped to $1.12 billion, or 66 cents a share, from $1.2 billion, or 71 cents, a year earlier, the Atlanta- based company said today in a statement. Excluding costs to close the company’s Expo business, earnings were 67 cents a share. Analysts projected 59 cents, the average of estimates compiled by Bloomberg. Sales in the three months ended Aug. 2 declined 9.1 percent to $19.1 billion. Yesterday, rival Lowe’s Cos. posted second- quarter profit and revenue that fell more than analysts estimated. Home Depot fell $1.03, or 3.8 percent, to $26.11 yesterday in New York Stock Exchange composite trading . The shares have gained 13 percent this year. Lowe’s shares slumped 10 percent yesterday, the biggest decline since Sept. 17, 2001, after the retailer said sales dropped 4.6 percent to $13.8 billion and narrowed its full-year forecast. Sales in stores open at least 13 months fell 9.5 percent in the period, the 12th consecutive quarterly decline, Mooresville, North Carolina-based Lowe’s said. To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

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Lowe’s Falls After Missing Estimates as Consumers Curb Remodeling Projects

August 17, 2009

By Mark Clothier Aug. 17 (Bloomberg) — Lowe’s Cos. , the second-largest U.S. home-improvement retailer, fell as much as 11 percent in New York trading after posting profit that trailed analysts’ estimates and narrowing its full-year forecast. Net income plunged 19 percent to $759 million, or 51 cents a share, from $938 million, or 63 cents, a year earlier, the Mooresville, North Carolina-based company said today in a statement. Analysts projected profit of 54 cents, the average of estimates compiled by Bloomberg. Lowe’s and larger rival Home Depot Inc. are competing for shoppers, who are taking on fewer large remodeling projects during the housing slump. Sales at Lowe’s in the three months ended July 31 fell 4.6 percent to $13.8 billion, also trailing estimates. “This is worse than expected,” Colin McGranahan , an analyst with Sanford C. Bernstein & Co. in New York, said in a telephone interview. “It’s a disappointment, but it’s obviously macro driven.” Lowe’s dropped $2.08, or 9.1 percent, to $20.75 at 10:13 a.m. in New York Stock Exchange composite trading after earlier touching $20.25, the biggest intraday decline since Oct. 10. Before today, the shares had climbed 6.1 percent this year. Home Depot, which reports earnings tomorrow, fell $1.35, or 5 percent, to $25.79. Lowe’s said it will slow its expansion in North America next year probably to 45 stores, at most. The chain incurred a pretax expense of $48 million, or about 2 cents a share , mostly for the cost of pulling out of some of the new store-site agreements. The company opened 18 locations in the second quarter, bringing its total to 1,688 in the U.S. and Canada as of July 31. It plans to open as many as 66 stores this year. ‘Reluctant’ Consumers “Cautious consumers remain reluctant to take on discretionary projects until signs of economic improvement are more evident,” Chairman and Chief Executive Officer Robert Niblock said in the statement. Lowe’s trimmed the high end of its full-year profit forecast by 4 cents, to $1.21 a share. Sales in stores open at least 13 months fell 9.5 percent in the period, the 12th consecutive quarterly decline. Chris Horvers , an analyst with JP Morgan Securities Inc. in New York, projected a decline of 7 percent. McGranahan estimated a 6 percent drop. Transactions of more than $500, which make up about 30 percent of revenue, fell 16 percent in the quarter, Niblock, 46, said today on a conference call with analysts and investors. To contact the reporter on this story: Mark Clothier in Atlanta at mclothier@bloomberg.net

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