Warmer weather, easier comparisons and tax cuts and rebates from the President's economic stimulus plan helped resuscitate retail sales in July.
Ultimate Electronics, the sole A/V specialty chain reporting, said net sales grew 9 percent to $154.1 million for the quarter ended July 31, reflecting the addition of 11 new stores, although comparable store sales slipped 10 percent for the same period. The chain, which is involved in a shareholder suit alleging faulty guidance, broke with tradition by providing no commentary on its results.
Elsewhere, Best Buy, which is slated to report its fiscal second quarter sales on Sept. 17, raised its earnings outlook for the period to a high range of 12 cents per share over analysts' estimates, based on strong comp store sales, increased gross profit rates and stringent cost controls. executive VP/chief financial officer Darren Jackson said several initiatives have helped shave costs while limiting gross profit drains from markdowns, product returns and exchanges, while continued consumer migration to higher-margin products like DTV have helped fatten gross profit rates.
Among full line chains, Sears said total sales were down 0.3 percent in July to $1.9 billion, while same stores sales slid 0.8 percent. CEO Alan Lacy said he was "pleased with July sales, which were in line with expectations. We were also pleased to see higher major appliance revenues, despite cooler weather that hurt air conditioning sales."
Specifically, the percentage change in sales of major appliances within Sears' full line stores was up by the low single digits compared to July 2002, while declines in CE sales were in the low teens.
Among the discount chains, Wal-Mart said net sales at its flagship stores were up 11.5 percent to $12.6 billion in July, while same-store sales rose 4.5 percent. The company cited CE, among other sectors, as an "above average category" for the month, and said both average ticket and traffic increased, with traffic accounting for nearly two-thirds of the comp gain.
The results were mirrored by Target Corp., which said total sales at its flagship stores grew 12.7 percent last month to $2.9 billion while comp sales gained 4.3 percent.
Kmart, which emerged from bankruptcy protection in May, re-issued first quarter results for the period ended April 30 that reflect the impact of "fresh start" accounting. The company's net loss was $862 million, representing a 38 percent improvement over the $1.4 billion net loss recorded during the year-ago quarter, while sales slipped 14 percent to $6.2 billion.
Among the wholesale clubs, Costco said net sales rose 12 percent to $3.3 billion in July while domestic same-store sales grew 6 percent. But despite the solid sales performance, the company lowered its earnings outlook for its fiscal fourth quarter ending Aug. 31 due to lower-than-planned gross margins, the higher cost of employee healthcare and workers' compensation, and increased initiatives to improve customer service and speed up the checkout process.
Net sales at Wal-Mart's Sam's Club division were up 8.7 percent to $2.5 billion in July while comp store sales grew 5.1 percent. Office products, among other sectors, was cited as one of the best-performing categories last month.
At BJ's Wholesale Club, July sales grew 18.2 percent to $485.7 million while comp store sales increased 10.1 percent, attributable, said president/CEO Mike Wedge, to warm weather and merchandising and marketing initiatives. Computer equipment and software were among categories cited for the strongest sales gains, while film and major appliances were among the weakest.
Sharper Image, the novelty CE specialty retailer, said total company sales increased 20 percent in July to $37.6 million while net store sales soared 23 percent to $22.1 million and comp store sales grew 11 percent. Founder/chairman/CEO Richard Thalheimer said consumers responded "very favorably" to new products including the company's first proprietary portable DVD/CD player plus a selection of branded digital cameras, as well as its best-selling Ionic Breeze air purifier.