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January Sales Remain Soft For Retailers

2/10/2003 02:00:00 AM Eastern

Dealers' December doldrums carried over into the new year as economic uncertainty and the threat of war conspired to suppress January sales for publicly held retailers.

Circuit City, which reports sales quarterly, noted during last week's announcement of its switch to a non-commissioned sales force that January comps slipped 2 percent. "Despite the overall sales softness, we continued to see strength in digital television, as well as movie and video game software sales," said chairman/CEO Alan McCollough. "Sales trends in DirecTV and wireless phones remained weak."

Ultimate Electronics, which reported its quarterly and year-end results, said sales for the three months ended Jan. 31 were up 13 percent to $242.3 million while comps declined 8 percent. For the 12 months ended Jan. 31, sales grew 21 percent to $704.2 million and same store sales slipped 2 percent.

"The softness of the holiday selling season, exacerbated by the aggressive promotional environment, led to a disappointing fourth quarter," said CEO Ed McEntire.

By contrast, OfficeMax said domestic comp sales for its fiscal fourth quarter, ended Jan. 25, were up more than 8 percent, thanks to "positive trends" during the holidays, January's higher-margin back-to-business selling season, and higher average tickets. These trends, said chairman/CEO Michael Feuer, stemmed from an enhanced marketing campaign aimed at its core business customer and improved in-stock levels achieved through an overhauled distribution infrastructure.

Among the full-line chains, Sears said January sales fell 6.3 percent to $1.6 billion, while comps slid 8 percent, led lower by weakness in consumer electronics. Chairman/CEO Alan Lacy said the same store results, which represented the 17th consecutive monthly decline in comps, were in line with its first-quarter plan of a mid-single digit falloff.

Wal-Mart reported an 11.2-percent net gain in January to $10.6 billion for its discount stores, while sales for the 12 months ended Jan. 31 rose 12.8 percent to $156.7 billion. Comps for the four weeks rose 2.6 percent, compared with 8.6 percent for the prior-year period, and same store sales rose 5.6 percent for the trailing 12 months.

Target Corp.'s flagship discount stores saw sales rise 9.8 percent to $2.4 billion in January while comps were flat with a gain of 0.3 percent.

Among wholesale clubs in January, Costco's net rose 9 percent to nearly $3 billion as comps gained 4 percent. Sales at Wal-Mart's Sam's Club gained 7 percent to $2.2 billion while comps grew 0.9 percent. And BJ's net grew 15.5 percent to $416 million, while comps increased 5.6 percent, due to lower prices on high volume goods.

For specialty retailer Sharper Image, total sales grew 42 percent in January to $34.7 million, with catalog sales up 16 percent, Internet/auction sales up 64 percent and total store sales up 52 percent. Comp-store sales grew 37 percent, which founder/chairman/CEO Richard Thalheimer attributed to "good store traffic with strong after-Christmas shoppers who found our unique regular-priced selection very attractive."