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Retail Sales `At Ease' In March

4/10/2003 03:20:00 PM Eastern

New York - Retailers blamed the war, the weather and even Easter - which this year shifts from March to April - for generally disappointing sales last month.

Among CE specialty chains, Tweeter Home Entertainment Group, which reported results for its fiscal second quarter ended March 31, said revenue slipped 2 percent to $182 million, attributable in part to the Iraqi conflict and the pre-war fears leading up to it.

Comparable store sales, excluding the Hillcrest chain's results for January and February, declined 12 percent for the three-month period.

'Clearly, the war is not good for our business, but the threat of war was not good for it either,' said president/CEO Jeff Stone.

Bright spots included Tweeter's flat panel business, which was up 120 percent in dollars and 146 percent in units over the same quarter last year, and now represents 11.6 percent of total sales. The company has also managed to reduce its inventory levels to $145 million, said CFO Joe McGuire, representing a 6.6 percent drop from a year ago.

Tweeter opened three new locations during the quarter, bringing its store count to 177, and plans only one relocation for the remainder of the fiscal year.

Looking ahead, Stone believes that Tweeter's customers will resume making big-ticket purchases once the war concludes and the marketplace stabilizes.

Among broadline mass merchants, Sears said total sales softened 2.3 percent to $2.4 billion for the five weeks ended April 6, while comparable store sales fell 3.1 percent, due in part to a drop in mall traffic after the start of the war. More specifically, comps for the company's full-line stores declined by the mid-single digits, while the comp sales number for its core major appliance business was down by the low-single digits. Comp sales for CE declined in the low double-digits.

Even Wal-Mart couldn't elude the Ides of March, as comp sales at its flagship discount stores were essentially flat at 0.3 percent for the month, and up a slim 0.7 for the corporation - well shy of the low-single digit gains it had forecast. The company attributed the weakness to unseasonably cold weather and what some call the 'CNN effect' - in which shoppers stayed home to watch war coverage - plus the calendar shift for Easter.

Thanks to its aggressive new store build out, however, total Wal-Mart division sales were up 7.2 percent to $14.951 billion for the five weeks ended April 4.

Results were similar at Target Corp's namesake stores, where total sales rose 6.1 percent to $3.3 billion while comps slipped 1.3 percent versus a 9.4 percent gain last year. The company cited the Easter shift for the downturn, and announced that it will likely miss its earnings target for the first quarter.

Kmart, in its most recent operating report, said total sales in February declined 1.3 percent to $2.17 billion while same store sales fell 2.5 percent. The company, which has slashed its store count by nearly a third, is expected to emerge from Chapter 11 bankruptcy protection on April 30.

By contrast, March came and left like a lion for the wholesale club channel. Costco said total sales grew 12 percent to $3.46 billion for the five weeks ended April 6, while comp sales at U.S. stores gained a solid 7 percent. The company said comps for its 'majors' category, which includes computers, audio, video and white goods, were up 3 percent following several consecutive months of declines. Majors represents the highest-volume sector within Costco's hardlines business, the retailer reported.

At Wal-Mart's Sam's Club division, total sales were up 7.6 percent to $3.098 billion and same store sales grew 2.6 percent, while BJ's said sales increased 15.8 percent to $554.0 million and comps gained 5.9 percent, no thanks to consumer electronics which were among the month's 'weaker categories.'

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