Retailers Report Mixed Market In Fiscal Q2

By Steve Smith -- TWICE, 8/30/2010

New York — Financials from publicly held retailers illustrated lackluster conditions in the quarter ending July 31, with the best performances being slight sales growth and/or showing single-digit profits.

Conn’s, the CE/majaps chain based in Texas, reported last Thursday a 67 percent drop in net income to $1.7 million and a 6 percent drop in total sales to $178.9 million compared with the prior year’s quarter.

Comp-store sales slipped 6.4 percent from a year-ago decline of 5.2 percent, but showed improvement from the 19.7 percent decline in the first quarter.

Wal-Mart Stores’ Walmart U.S. net sales were flat during the quarter compared with the previous year, at $64.65 billion. Walmart U.S. operating income was down 0.2 percent to $4.88 billion. Comp-store sales without fuel in the U.S. were down 1.8 percent. At Sam’s Club, operating income for the quarter was $428 million, up 2.4 percent. Comp-store sales, excluding fuel sales, were up 1 percent for the quarter.

Target reported net earnings of $679 million for the quarter, compared with $594 million in the prior year’s quarter. Net earnings were $679 million, up 14.3 percent. Retail segment sales increased 3.8 percent in the second quarter to $15.1 billion, due to the contribution from new stores combined with a 1.7 percent increase in comp-store sales. Retail segment earnings were up 3.1 percent to $1.1 billion.

Lowe’s did better than rival Home Depot in the quarter, with reported net earnings of $832 million, a 9.6 percent increase from the same period a year ago. Sales for the quarter increased 3.7 percent to $14.4 billion, up from the prior year. Home Depot has net earnings of $1.2 billion, compared with the prior year’s $1.1 billion. Sales for the second quarter totaled $19.4 billion, a 1.8 percent increase. Compstore sales for the second quarter were up 1.7 percent, and comp sales for U.S. stores were a positive 1 percent.

BJ’s Wholesale Club reported net income for its fiscal second quarter of $35.8 million, up slightly from the prior year’s $35.1 million. Total sales for its second quarter, ended July 31, increased by 8.6 percent to $2.7 billion.

Sears Holdings reported a net loss of $39 million on essentially flat sales of $10.5 billion for the second quarter ended July 31. The corporate parent of Sears and Kmart said a 2.2 percent overall comp-store sales reflects a 1.4 percent decrease at Kmart and 2.8 percent decrease at Sears.

Staples reported higher profits on flat sales for the quar- Retailers Report Mixed Market In Fiscal Q2 ter. Net income increased 40 percent to $130 million for the three-month period on stagnant sales of $5.5 billion company-wide. Retail sales in North America rose 2 percent year over year to $2 billion while same-store sales were flat, attributable to reduced customer purchases despite increased traffic. — Additional reporting by Alan Wolf and other TWICE editors.