Most discounters report sales increases, but miss forecasts
New York Target Corp. said Thursday that sales were “relatively soft” in June as same-store sales rose 1.7%, short of analyst expectations. The retailer’s total revenue for the five weeks ended July 4 rose 4% to $5.92 billion.
Clothing, food, health care and beauty products were strong sellers. But electronics, video games, music and movies were weaker. CEO Gregg Steinhafel said that while sales were “relatively soft” for the second month in the quarter, its mix of products, cost cuts and improvements in its credit-card segment helped profitability in the month.
TJX Cos. on Thursday said that its June same-store rose 3%. Analysts, on average, had expected same-store sales to rise 4.2%. The company raised its outlook for the second quarter and its estimate for the full year.
Total sales for the five weeks ended July 4 rose 7% to $2 billion.
Carol Meyrowitz, president and CEO of The TJX Companies Inc., stated, “Consolidated comparable-store sales were solidly within our estimated range and The Marmaxx Group reported a comp sales increase at the high end of our forecast. It is important to note that these comp sales increases were achieved on top of our strong increases last year when many other retailers had sharp comp sales declines. Further, business continued to be driven by increases in customer traffic which led to the sustained strength that our June sales represent.”
Costco Wholesale Corp. saw June same-store sales rise 4%, marginally missing market expectations. The fact that Memorial Day fell in the June reporting period, unlike the previous year, hurt sales by about 2% , the company said. This year’s five-week period included 33 trading days in the United States versus 34 last year.
For the five weeks ended July 4, Costco’s net sales rose 7% to $7.33 billion from the previous year.
In other same-store sales results for June:
• Ross Stores’ sales climbed 5%, just short of analysts expectations, as customers bought more items for their homes along with dresses and shoes. Overall revenue from the month rose 9% to $725 million from $666 million. The discounter boosted its second-quarter guidance. •At BJ’s Wholesale Club Inc., sales increased 3.8% in the five-week period ending July 3, not as much as analysts had expected. Excluding revenue from gasoline sales, the measure climbed 3.2%, missing the 4.4% jump on that basis that analysts had expected. • Fred’s Inc. said its sales rose 1.2%, short of analysts expectations.
Tractor Supply reports 2Q sales growth
BRENTWOOD, Tenn. Tractor Supply Company reported that net sales for the second quarter 2010 increased 12.6% to $1.07 billion from $946.5 million in the second quarter of 2009. Same-store sales increased 6.1% compared with a same-store sales decrease of 2.7% in the second quarter of 2009. The company said it anticipates that net income for the second quarter will be approximately $75.6 million to $76.7 million, or $2.03 to $2.05 per diluted share, compared with $54.8 million, or $1.50 per diluted share, in the prior year’s second quarter.
Jim Wright, chairman and CEO, stated, “We are delighted with our second quarter performance. Consumable, usable and edible categories, such as pet food and animal feed, continued to be solid sales drivers and contributed to our 6.9% comp transaction count increase. We had expected favorable moisture levels and were able to take advantage of this with strategic inventory allocation and effective markdown management. As a result, we achieved strong same-store sales, higher gross margin, expense leverage and better-than-expected earnings.”
The company raised its expectations for fiscal 2010 net sales of $3.49 billion to $3.53 billion compared to its previous expectations of $3.44 billion to $3.50 billion. Same-store sales for the year are now expected to increase by 2.5% to 3.5%, up from the company’s prior guidance of 1% to 3%. The company said it now anticipates annual net income to range from $4 to $4.10 per diluted share compared with its previous guidance of $3.48 to $3.60 per diluted share.
Borders looks to corner e-book market
ANN ARBOR, Mich. Borders Group announced the launch of the Borders branded e-book store, powered by global e-reading service Kobo.
“The race to emerge as a retail leader within the digital category is just starting,” said Mike Edwards, CEO for Borders. “During the past several months, we’ve been carefully crafting a digital strategy, one that has great content and a device-neutral philosophy backed by the Borders brand as its cornerstones. We believe we are very well positioned to come out strong and to ultimately claim about a 17% e-book market share by this time next year.”
The company also announced that it is making available to consumers BlackBerry and Android e-reading applications, also powered by Kobo.