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Retail Enjoys Late Summer Sales Boost

9/15/2003 02:00:00 AM Eastern

Brisk back-to-school sales of PCs and other electronics dorm room fare — fueled by child tax credit refund checks — helped boost August and second quarter sales for CE specialty chains and mass merchants.

At Best Buy, fiscal second quarter revenue from continuing operations grew 17 percent, to $5.4 billion. The sales gain was goosed by a 7.5 percent rise in comp-store sales, as well as the addition of 74 stores in the past 12 months.

Revenue from continuing operations at Best Buy domestic stores jumped 14 percent in the second quarter, hitting $4.9 billion. Comp-store sales climbed 7.8 percent in the three months, ended Aug. 30, with home office and consumer electronics categories experiencing the largest revenue improvement.

Magnolia Hi-Fi, which has been re-dubbed Magnolia Audio Video, saw second quarter revenue increase 10 percent to about $30 million, reflecting the impact of stores opened in the last 12 months. Revenue growth at the Seattle-based retailer was partially offset by a comp-store sales drop of 5.9 percent.

The CE category declined slightly in the revenue mix, down to 35 percent, from 36 percent, despite a comp-store sales gain that reflected the demand for digital, plasma and LCD televisions, as well as the rising popularity of digital cameras and camcorders.

A cool June limited demand for air conditioners, driving down appliance category share to 7 percent, compared with 8 percent year-over-year. Majaps posted a comp-store sales decline in the low single digits during the period.

By contrast, Circuit City said total second quarter sales slipped 3 percent to $2.7 billion and same store sales fell 5 percent, albeit against a 10 percent comp gain during the year-ago period.

CEO Alan McCollough said sales steadily improved throughout the quarter, ended Aug. 31, culminating in a 1-percent comp gain in August. He attributed the rebound to a traffic-driving back-to-school ad campaign that propelled sales of PC hardware and software, wireless communications, gaming software and personal audio and video.

McCollough noted that 217 stores had been refixtured during the quarter to improve adjacencies of like products, expand assortments in key areas like flat screen TVs, and place virtually all product on the sales floor for easier customer access.

At Sears, total sales were up 4.1 percent in August to $2.1 billion and same store sales grew 3.9 percent "due primarily to improving sales in our home appliance business," said CEO Alan Lacy. (See story, p. 34.) Indeed, majap sales were up by the low double digits, the company reported, while CE sales continued to slide, down by the high single digits last month.

Among the discount chains, Wal-Mart said total revenue at its flagship stores was up 13.8 percent in August to $13.4 billion and comp sales grew 6.6 percent. Similarly, net sales at Target's flagship stores rose 15.9 percent in August while comps grew 8.3 percent.

Meanwhile, second quarter net sales at Kmart fell 21.3 percent to $5.6 billion, reflecting the closure of some 300 stores last year, while comps declined 5.4 percent. The company, which emerged from bankruptcy protection last May, posted a $5 million loss for the period, ended July 30, compared to a loss of $293 million for the year-ago quarter.

Among wholesale clubs, Wal-Mart's Sam's Club, which is engaged in a price war with Costco, enjoyed an 11.3 percent hike in net sales last month to $2.6 billion and an 8.2 percent spike in comp sales, compared to a 1.1 percent gain last year. Conversely, Costco's net sales soared 13 percent in August to $3.4 billion while comps at domestic stores grew 8 percent.

Total August sales at BJ's Wholesale Club grew 18.3 percent to $496.7 million while comps gained 10.9 percent. The company cited PCs, prerecorded media and TVs among the month's strongest performers.

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