Discounters post stronger than expected March results
New York City — Although there were some same-store drops among the discount retail players in March, most beat Wall Street expectations and showed that shoppers are continuing to spend despite a less-than-ideal economic climate.
Costco Wholesale Club was a strong performer in March, beating analysts’ estimates with a 7% rise in same-store sales for the month, excluding fuel. Wall Street expected a 5.5% increase.
Target Corp. posted a 5.5% same-store sales drop in March, but still beat analysts’ expectations of a 6.4%, decrease according to a Thomson Reuters poll. The discount chain said that groceries were the strongest category in the five weeks ended April 3, and clothing also performed well. Target said that the later Easter negatively impacted sales of candy and toys, in particular.
"For the most part retailers are posting a little better than expected March performance," said Dana Telsey, CEO of Telsey Advisory Group.
While Wal-Mart Stores doesn’t report monthly sales, its Mexican arm Wal-Mart de Mexico reported a 1.1% decrease in same-store sales for March.
Among other discount results during the month:
- SteinMart reported a 3.9% decrease in same-store sales;
- Ross comps dropped 1%;
- BJ’s Wholesale rose 1.3%.
The TJX Cos. reported a 1% same-store sales decline, which beat company and Wall Street expectations.
“As a reminder, we had planned March comp store sales down versus last year due to the timing of Easter as well as very favorable weather patterns in the prior year,” sad Carol Meyrowitz, TJX CEO. “Despite these challenges, we were encouraged to see comp store sales increases across all warm weather regions in the United States, which bodes well for the balance of the season.”
Nordstrom and Saks lead department stores in March
New York City — Showing that luxury is experiencing measurable bounce in the recovering economy, the higher-end department stores led the same-store sales pack in March.
Saks outperformed the rest of the category, recording an 11.1% same-store sales increase during the month. Total sales rose 9.2% to $260.2 million, compared with $238.2 million in the year-ago period.
For March, the strongest categories at Saks Fifth Avenue stores included women’s designer collections and contemporary apparel, men’s apparel, women’s and men’s shoes, handbags, fashion jewelry and fragrances.
Nordstrom recorded a 5.1% same-store increase in March, surpassing Wall Street expectations for a much smaller 0.7% rise. While analysts had anticipated that the late Easter would shift some shopping from March to April, Nordstrom said that customers bought bigger-ticket items in March than a year earlier.
Macy’s reported a same-store sales rise of 0.9%. Online sales rose 34.8% in March.
“March sales exceeded our expectations and demonstrated that our spring fashion assortments are hitting the mark with customers,” said Terry J. Lundgren, chairman, president and CEO of Macy’s. “We generated same-store sales increases at both Macy’s and Bloomingdale’s, despite a calendar shift in which the pre-Easter period and a planned cosmetics promotion at Macy’s fall into April this year versus March last year,” he said.
J.C. Penney same-store sales dipped 0.3% in March, impacted as expected by the shift of Easter out of the March reporting period.
In other department store same-store sales news:
- Kohl’s dropped 6.5%;
- Bon-Ton Stores dropped 6.1%;
- Dillard’s dropped 1%.
Discounters thriving north of the border
MONTREAL – U.S. discount-store operators should keep an eye on their Northern neighbors, as Canadian dollar stores continue to thrive. Anticipating their growth potential, Virginia-based Dollar Tree acquired Canada’s Dollar Giant Store in November 2010, adding 86 more stores to its repertoire and marking its first expansion outside of the United States.
More recently, canadian dollar-store operator Dollarama reported that sales for the fourth quarter ended Jan. 30, increased 12.3% to $408.7 million from $364.1 million in the fourth quarter ended Jan. 31, 2010. According to the company, the increase was driven by the opening of 49 net new stores during the fiscal year ended Jan. 30 and comparable store sales growth of 5.3% in the fourth quarter. The company added that although Christmas sales were strong, unfavorable weather conditions in January compared to last fiscal year negatively impacted the number of transactions in the fourth quarter of fiscal 2011.
"We are pleased with our fourth quarter and year-end financial and operating results. Providing consumers with a compelling value proposition by offering an assortment of merchandise at multiple price points proved to be a very efficient strategy in generating strong cash flows," said Larry Rossy, CEO of Dollarama.
Dollarama opened 49 net new stores in fiscal 2011; above expectations, according to Rossy. He said the company is on track to open approximately 50 new stores during fiscal 2012.
Dollarama operates 652 stores across Canada.
Dollar Tree acquired the 86 Dollar Giant stores including substantially all assets, inventory, leasehold rights and intellectual property for approximately $52 million in cash, plus the assumption of certain liabilities.