Costco exceeds expectations in July; increases at Target and TJX just slightly below forecasts
New York City Costco Wholesale Club said its same-store sales rose 6% in July, helped by fuel sales and international revenue, which was better than the 5.5% analysts had forecast. The company reported net sales of $5.86 billion, up from $5.42 billion in 2009.
Same-store sales rose 4% in the United States and 14% internationally. Food, home furnishings, jewelry and men’s apparel were strong sellers, while electronics, including TVs, were weaker.
Target said Thursday an increase in customers and higher food sales helped July revenue in stores open at least a year rise 2%, just short of analyst expectations of a 2.3% increase, according to a Thomson Reuters poll.
Target’s total revenue for the four weeks ended Aug. 1 rose 4% to $4.59 billion. The chain said strong food, household and beauty product sales were coupled with weak electronics, video games, music and movie sales. The average total purchase per customer shrank, but more customers bought items. Strongest regions were the upper Midwest and the Mid-Atlantic states, while California, Arizona and New Mexico were weaker.
TJX Cos., which runs the T.J. Maxx and Marshalls chains, reported a 2% rise in same-store sales in July, a bit short of the 2.4% increase analysts were expecting. Total revenue for the four weeks ended July 31 rose 6% to $1.5 billion.
TJX CEO Carol Meyrowitz said in a statement that the company managed inventories tightly during the second quarter, which resulted in less clearance merchandise in July.
While that might have hindered revenue growth, she said, second-quarter margins and net income “are in excellent shape.”
In other same-store sales results for July:
- BJ’s Wholesale Club’s same-store sales rose 2.8% in July. Excluding gasoline sales, the measure rose 1.9%. Its results fell short of expectations.
- Big Lots’ same rose 3.8% in the second quarter. Total revenue for the three months ended July 31 rose 6% to $1.13 billion.
- Fred’s sales rose 2.7%, below forecasts.
Eddie Bauer closes asset sale with Golden Gate Capital
SEATTLE, Wash. Eddie Bauer announced that it has completed the previously announced sale of its assets and operations to Golden Gate Capital for $286 million. Eddie Bauer will operate as a newly formed company, will continue to serve its customers as usual, and will be better positioned for future success.
Eddie Bauer will have the benefit of a much stronger balance sheet, little or no long-term debt and a substantially lower cost structure. Golden Gate Capital has indicated its support for management and their strategy of refocusing the brand on its rich outdoor heritage. Eddie Bauer plans to maintain the substantial majority of its stores and employees. Under Golden Gate’s ownership, Eddie Bauer will benefit from having a well-capitalized partner with extensive expertise in multi-channel specialty retail.
Neil Fiske, president and CEO of Eddie Bauer, said, “We are delighted to have Golden Gate Capital as our partner in building Eddie Bauer as a great American brand. Golden Gate has a proven track record and knows our industry well. We will benefit immensely from the value and capability they will bring to Eddie Bauer. With key new product launches slated for Fall and Holiday, a healthy balance sheet and a lower cost structure, we will be well positioned to grow Eddie Bauer. This is an excellent result for our people, our customers, our business partners and the communities we serve. We look forward to an exciting new chapter in the Eddie Bauer story.”
Charming Shoppes broadens partnership with Wipro
BANGALORE, India Wipro announced that it has entered into a five-year strategic agreement to provide Charming Shoppes with end-to-end information technology services that include application management, remote infrastructure management and mainframe hosting. This partnership will be an integral component of Charming Shoppes’ transformation journey to optimize IT spend and improve business agility.
Under the agreement, Wipro will be responsible for application management of the entire suite of applications encompassing stores, supply chain, merchandising, marketing and analytics, business intelligence and corporate systems. Wipro will provide hosting services from its state-of-the-art U.S.-based data centers and manage infrastructure using a robust ITIL-based service management framework including data center operations, network and security operations and performance management. These services will be delivered across stores, distribution centers and the corporate brand offices of Charming Shoppes.
During the term of the agreement, Wipro will work with Charming Shoppes to affect year-over-year improvements in performance and efficiency thereby providing stable, flexible and scalable IT platforms to help the retailer achieve business objectives, focus on core brands and increase cash flow. Charming Shoppes will maintain a viable ongoing IT operation in Bensalem and retain key retail business and technical expertise.
“As the leading provider of women’s specialty plus apparel, our focus is on strengthening our brands and providing a superior customer experience,” said Denis Gingue, SVP and CIO of Charming Shoppes. “We rely on IT as a critical enabler for our businesses – and strategic partnerships are critical to our future success. We selected Wipro because of their retail and fashion experience, technical competency in infrastructure and applications and their process discipline in IT operations.”