January Sales Mixed for Big U.S. Retailers : Several Chains Delay Reporting to Adjust Fiscal-Year Calendars
Shoppers in search of warm clothing and January bargains helped most of the nation’s major retailers wind up their fiscal years with satisfactory sales gains for the month, according to figures released Thursday. But analysts said the January results are not expected to have much effect on fourth-quarter and full-year earnings.
“January is never a month on which to make investment decisions,” says Walter Loeb, an analyst with Morgan Stanley & Co. in New York. “Everything is marked down; it is not necessarily a profitable month. Retailers just hope to dispose of as much merchandise as they can to begin cleaner and leaner and fresh with the new year.”
Sales results for the four weeks ended Jan. 26 were mixed. They ranged from a 16.3% increase over a year ago for K mart Corp. of Troy, Mich., to a 3% drop for Chicago-based Montgomery Ward & Co., a unit of Mobil Oil Corp.
‘It’s a Mess’
In an unusual departure from their routine monthly reporting schedule, not all chains disclosed their January results. Sears, Roebuck & Co., Carter Hawley Hale Stores Inc., Associated Dry Goods, Allied Stores Corp. and R. H. Macy & Co. all said that they will report January sales next Thursday.
“It’s a mess,” Loeb said. “Basically, some are reporting four weeks because the (results) would be comparable with last year. This is a 53-week year for many retailers.”
He explained that this phenomenon occurs every six years because retailers typically operate each year on a basis of 52 weeks with seven days each, or a total of 364 days. As a result, every six years they must take into account an additional week in their fiscal results.
Most retailers operate on a fiscal year that ends in January. This year, the month includes five rather than four weeks.
Many, but not all, retailers will restate their sales figures next week to adjust for the calendar difference.
Among the chains reporting, K mart said its 52-week sales were up 12% from a year ago, while Montgomery Ward said its sales for the period were up 7.1%.
Federated Department Stores Inc. of Cincinnati, which operates I. Magnin, Bullock’s and other chains, reported that sales, excluding those of its Ralphs supermarket division, were up 2.4% in January from last year and rose 9.94% for the 52-week period. Including the sales of Ralphs, the figures were up 4.7% for the month and 10.7% for the 52 weeks.
Howard Goldfeder, Federated’s chairman and chief executive, said: “Unusual cold and severe weather conditions in most markets in which we operate held sales gains for our general-merchandise segments below our expectations for January.”
Minneapolis-based Dayton-Hudson Corp., which operates Mervyn’s and Target, said its four-week sales were up 12.7%, while 52-week sales rose 15.5%.
May Department Stores Co., the St. Louis parent of May Co. California, had a four-week increase of 9.3% and a 52-week gain of 12.5%.
Monroe Greenstein, an analyst at Bear, Stearns & Co. in New York, said that, generally, “there was no strong follow-through from Christmas. Consumers are not responding much to promotions. They’ve been promoted to death since the early fall season. Retailers are not looking for a strong pickup in business until March.”
