Wal-Mart Cuts Outlook Amid December Retail Gloom
New York City Sales at the nation’s retail chains declined in December nearly across the board. Even top-performing Wal-Mart Stores Inc. posted a smaller gain than what Wall Street expected and cut its fourth-quarter-earnings outlook.
Wal-Mart, blaming the weak economy and severe winter conditions, said that same-store sales rose 1.2%. Excluding the impact of declining gasoline prices at the pump, the gain was 1.7%.
Wal-Mart noted that health-and-wellness items were the categories that primarily fueled sales. Electronics sales were solid, while the apparel and jewelry business was weak.
Target Corp. on Thursday said its same-store sales fell 4.1% in December, but the result was better than the 9.1% drop Wall Street analysts predicted. The retailer said the results reflected stronger sales in the last two weeks of the month.
Target president and CEO Gregg Steinhafel said the company reduced prices during the month to gain market share. The markdowns, combined with additions to the company’s accounts receivable allowance, will reduce profitability in the fourth quarter.
Target said overall sales in December rose 0.2% to $9.28 billion from $9.26 billion in Dec. 2007.
Many retailers reported steep declines, including Saks, Sears and Williams-Sonoma.
Saks said its December same-store sales fell 19.8%. Analysts, on average, had expected the same-store sales to fall 10%. Total sales for the five weeks ended Jan. 3 fell 18.9% to $363 million.
Sears Holdings said its December same-store sales dropped 7.3%, weighed down by a 12.8% drop at domestic Sears stores. Kmart same-store sales fell 1.1%.
In other results:
- Williams-Sonoma Inc., which didn’t break out December figures, said its same-store sales dropped more than 24% for the eight-week period ended Dec. 28, 2008 and warned its fourth-quarter profit will likely come in at the low end of expectations.
- Nordstrom Inc. said its same-store sales for December dropped 10.6% — beating Wall Street’s expectations of a steeper decline — and higher-than-expected markdowns forced the luxury retailer to lower its earnings forecast. The company said total sales fell 8% to $1.13 billion for the five-week period ended Jan. 3 from $1.22 billion in the prior year, based on preliminary results. For the year-to-date period, same-store sales fell 8.9% compared to the year-ago period.
- Dillard’s Inc.’s same-store sales fell 5% in December, hurt by lower sales of children’s clothes and furniture. The results beat analysts’ projections.
Wal-Mart, Netflix accused of monopoly building
NEW YORK Wal-Mart Stores and Netflix have been accused of trying to build a monopoly for online DVD rentals in a consumer lawsuit filed Jan. 2 in the U.S. District Court of the Northern District of California, according to reports.
The plaintiffs claim that in 2005, Wal-Mart agreed to end its online rental business and refer customersto Netflix, which in turn agreed to promote Wal-Mart’s DVD movie sales.
Family Dollar posts 1Q earnings growth
MATTHEWS, N.C. Family Dollar Stores reported that net income per diluted share for the first quarter of fiscal 2009 increased 13.5% to 42 cents compared with 37 cents for the first quarter of fiscal 2008. Net income for the quarter increased 14.1% to $59.3 million compared with net income of $51.9 million for the first quarter of fiscal 2008.
As previously reported, sales for the first quarter of fiscal 2009 were approximately $1.754 billion, or 4.2% above sales of approximately $1.683 billion for the first quarter of fiscal 2008. Comparable-store sales increased 2.1%.
For the fiscal year ending August 29, 2009, the company expects net sales will increase 4% to 6% and expects comparable-store sales will increase 2% to 4%. Anticipating continued strong sales of consumable merchandise, the company expects earnings per share will be between $1.63 and $1.81 in fiscal 2009.