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June Retail Sales Slow

7/12/2004 02:00:00 AM Eastern

June sales were disappointing for most broad line merchants, who blamed it on cool, wet weather during the start of room air season and the Father's Day and graduation gift-giving period. Retail analysts are concerned, however, that a repeat performance in July could augur a downturn in consumer spending.

Tweeter Home Entertainment Group, the lone specialty CE chain reporting sales, said total revenue for the third fiscal quarter, ended June 30, slipped 1 percent to $168 million and that comparable store sales slid 2 percent.

Despite the tepid results, president/CEO Jeff Stone said new initiatives were beginning to gain traction, as indicated by a 5 percent sales gain in June and a backlog of home installation orders. That, plus a revamped marketing strategy which launches next month, gave Stone hope that the company is in the final stages of its turnaround, and that "this is our last negative comparative sales quarter for the foreseeable future."

Among full-line stores, Sears said total sales fell 4.4 percent for the five weeks ended July 5, while comp sales declined 3.1 percent. Specifically, CE sales were up by the low single digits, while major appliance sales, including plumbing supplies, were down by the midsingle digits. The latter, said chairman/CEO Alan Lacy, was impacted by a "pronounced decline in air conditioning revenues due to cooler weather."

Among discounters, sales at Wal-Mart's flagship stores rose 8.3 percent to $18.1 billion for the five weeks ended July 2, although comp sales came in at 1.3 percent, the low end of the company's forecast. Similarly, sales at Target's flagship stores rose 8.7 percent to $3.9 billion for the five weeks ended July 3 while comps grew 2.2 percent.

Among wholesale clubs, total sales at Costco were up 9 percent to $4.6 for the five weeks ended July 4, while total comps grew 6 percent. At Wal-Mart's Sam's Club division, sales for the five weeks ended July 2 rose 7.8 percent to $3.6 billion, and comps grew 6.4 percent. June sales at BJ's grew 11.3 percent to $731 million, and comps rose 7.4 percent. TVs were among categories with the strongest sales increases, although president/CEO said lower sales of room air conditioners, fans and other seasonal products negatively impacted comps by 1.7 percent.

Specialty retailer Sharper Image said companywide sales grew 23 percent to $50.8 million in June while comp store sales gained 2 percent, thanks to record revenue during the Father's Day and graduation gift-giving season.

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