February proved a solid sales month for most of the nation’s general merchandise discounters, with consumer electronics serving as a key revenue driver.
However, comp-store sales remained weak at Wal-Mart, with the flagship discount stores posting a 0.4 percent gain for February. Total sales increased 5.6 percent to $17.6 billion for the month.
The world’s largest retailer said it was impacted by unfavorable weather, with traffic down in comparable stores. It attributed the modest same-store sales increase to average ticket size, and reported that CE performed “above average” for the month. In a research note, Banc of America Securities analyst David Strasser cited particular strength in digital TVs, MP3 players and both desktop and laptop computers, the latter driven by the launch of Vista.
At Target, comp-store sales grew 5.7 and net sales increased 10.7 percent to $4.1 billion. The discounter cited CE among its strongest comp-sale gainers for the month, and music and movies among its weakest. Target attributed its strong sales performance to increases in the average transaction amount and number of transactions.
Among the warehouse clubs, Costco said comp sales increased 4 percent in February and net sales rose 9 percent to $4.6 billion. The company also reported results for its second fiscal quarter. For the three months, ended Feb. 18, net sales increased 7.3 to $14.8 billion, comp sales increased 5 percent, and net income fell 15.8 percent to $249.5 million. The results reflect a sales reserve increase and a $48.1 million charge to income following a detailed analysis of Costco’s returns related to the recently announced cap on CE returns. (See p. 4.) Excluding those items, plus other one-time charges, net sales were $15 billion, up 9 percent, and net income was $302.9 million, up 2.3 percent.
At Wal-Mart’s Sam’s Club division, comp sales increased 3.9 percent and net sales grew 4.2 percent to $3.2 billion last month, with CE continuing its “strong growth,” the company said.
For BJs, February brought a 3 percent gain in comp sales and a 7.2 percent spike in net sales, to $601.7 million. Average transaction increased about 3 percent and traffic decreased by approximately 1 percent, the company said. BJs also reported its fiscal fourth quarter and full-year results. For the three months, ended Feb. 3, net sales rose 13.4 percent to $2.4 billion, comps increased 1.5 percent, and net income fell 76 percent to $11.9 million. For the full fiscal year, net sales rose 7.2 percent to $8.3 billion, comps increased 1.2 percent, and net income declined 44 percent to $72 million.
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