New York - Reflecting the nascent economic recovery, retail sales gained traction last month as mass merchants enjoyed solid gains and A/V specialist Tweeter Home Entertainment Group reported flat annual and fourth-quarter revenues.
Among full-line retailers, Sears said total sales for the five weeks ended Oct. 4 rose 3.5 percent to $2.5 billion and comp store sales rose 3.2 percent. CEO Alan Lacy described white goods’ low single-digit percentage gain as a 'solid increase' that contributed to the positive results, although consumer electronics continued their slump, falling by the high single digits.
Among discount chains, net sales at Wal-Mart’s flagship stores for the five weeks ended Oct. 3 rose 12.7 percent to $15.9 billion while same store sales rose 5.6 percent. Net sales at Target’s flagship stores rose 14.8 percent to $3.4 billion for the five weeks ended Oct. 4, while comp sales grew 7.2 percent.
Among the warehouse clubs, Costco said total sales for the five weeks ended Oct. 5 grew 13 percent to $4 billion while company-wide comps gained 10 percent. Wal-Mart’s Sam’s Club saw net sales rise 11.8 percent to $3.2 billion for the five weeks ended Oct. 3 while comps rose 8.2 percent, and BJ’s Wholesale Club said net sales rose 20.2 percent to $606.4 million for the five weeks ended Oct. 4 while comps gained 12.4 percent.
BJ’s CEO Mike Wedge cited computer equipment among categories with the strongest sales increases.
Meanwhile twelve-month net sales for Tweeter decreased 1.3 percent to $786 million for the full fiscal year, ended Sept. 30, 2003, while comparable store sales declined 9.9 percent.
Net sales for Tweeter’s fiscal fourth quarter, ended Sept. 30, remained flat at $183 million, while same-store sales fell 6.8 percent, representing the 10th consecutive quarter of comp store declines.
The specialty chain broke with tradition by not breaking out performance by category, although it noted that it achieved a previously announced goal of reducing discontinued and open box inventory from 17 percent to less than 10 percent of inventory during August and September.
The inventory reduction came at a price, however. According to chief financial officer Joe McGuire, the negative impact to gross margin was nearly $8 million, or more than twice previous estimates. This has widened Tweeter’s expected net loss for the fourth quarter from between $4 million and $5 million to between $9 million and $10 million, he said.
Looking ahead, McGuire said it is buying inventory for the December 2003 quarter to support a 4 percent to 5 percent increase in comp store sales, although the company is planning operating expenses based on flat sales expectations.