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CE Helps Target, Walmart, Hurts Sears In Fiscal 2nd Quarter


CE was a cited factor in the quarterly
performances of three national retailers, with
Target benefiting the most, Walmart citing progress
and Sears getting hurt.


reported mid-single-digit sales and earnings
gains for its second fiscal quarter, ended July
30, and a resurgence in its CE business.

Profits rose 3.7 percent to $704 million on total
sales of $15.9 billion, a 5.1 percent increase. Compstore
sales increased 3.9 percent, while credit card
revenues decreased 15 percent to $345 million.

Merchandising executive VP Kathy Tesija said the
most notable improvement was in CE, where tablets
led by iPad “were quite strong” and TV sales
showed “stability, and even growth,” following several
quarters of contraction.

In addition Target has expanded its CE trade-in
service to 1,490 stores, and is accepting additional

The service, provided in partnership with Bostonbased
CE exchange and recycling service Next-
Worth, will now be offered in all stores with Target
Mobile centers.

The trade-in program now also accepts preowned
calculators and DVDs, in addition to iPods,
iPads, iPhones, cellphones, Nintendo DS units and
video games.

Wal-Mart Stores

said Walmart U.S. and Sam’s
Club reported higher sales in its fiscal second quarter,
but corporate comp sales were flat in the U.S.,
but CE sales were cited as a positive trend.

Walmart U.S. stores had sales of $64.9 billion,
up 0.4 percent, but comp-store sales, excluding
fuel, was down 0.9 percent in the quarter, compared
with a 1.8 percent drop the prior year.

Sam’s Club reported sales of $12 billion, excluding
fuel, an increase of 4.9 percent when compared
with the prior year’s second quarter. Sam’s Club
had a 5 percent increase in comp-store sales for
the quarter vs. the prior year’s 1 percent increase.

Total comp-store sales for Wal-Mart Stores were
flat in the quarter, excluding fuel, compared with a
1.4 percent drop in last year’s quarter.

Operating income for Walmart U.S. stores was
up 2.1 percent to $4.9 billion compared with last
year, while Sam’s Club had a gain of 15 percent to
$492 million.

Bill Simon, Walmart U.S. president/CEO, commented
on CE, saying, “Our hardlines [sales] are
improving,” but he noted, “We remain concerned
about the economic pressure on our customers and
the uncertain impact it can have on their shopping

In a recorded earnings announcement, Simon
reported, “Double-digit deflation in TV prices still
exists, but our unit sales were up again. Customers
want innovation, and tablets continue to sell very
well. We continue to see strength in our prepaid
wireless business [and] Straight Talk remains a $1
billion-plus brand for Walmart U.S.”

He added that during the quarter, “we also
launched a delivery and installation service program
for electronics. We’re providing delivery, setup and
installations for TVs. We also offer basic setup for
home theater and wireless networks. The in-home
service network has up to 50,000 technicians available
to service our customers. Our prices are very
competitive, and this now puts us on par with other
electronics retailers.”

At Sam’s Club, Brian Cornell, president/CEO,
said, “Even with average selling price deflation, our
consumer electronics business delivered a mid-single-
digit comp sales increase. New products like
tablets are driving greater sales in electronics.”

Sears Holdings

reported a deeper loss for its
fiscal second quarter, with lower CE sales being
blamed for decreases in comp-store sales.

The net loss was $146 million, which was higher
than the $39 million loss in the prior year’s second
quarter. Revenues were $10.3 billion, down slightly
from the prior year’s $10.5 billion.

Sears Domestic comp-store sales declined 1.2
percent, which would have been flat if CE sales
didn’t go down, the company reported. While
Kmart’s comp-store sales received a boost from its
appliance business, CE, among other categories,
was a drag on that chain’s volume also.

Sears Holdings said that beginning with the first
quarter of 2011, it includes in comp-stores sales online
sales from


directly to customers. These online sales increased
32 percent over last year.

The operating loss for Kmart during the second
quarter was $16 million, compared with a profit of
$19 million in the prior year. The Sears Domestic
loss for the quarter was up $98 million, to $163 million,
in the quarter.

Sales for Kmart were $3.62 billion in the quarter,
down slightly from the prior year’s $3.63 billion.
At Sears Domestic, sales were $5.53 billion,
down from $5.67 million in the prior year’s second