Carter Hawley in Red for Quarter : Dayton Hudson Profit Skids; Penney Earnings Jump

Carter Hawley Hale Stores, owner of the Broadway, Tuesday reported a sharp drop in earnings for the most recent quarter, a period characterized by sluggish consumer spending and declining sales throughout the industry.

Dayton Hudson, the parent company of Mervyn’s and Target chains, also reported a big drop in earnings on Tuesday. And J. C. Penney, while showing an overall increase in profit, showed a drop in earnings on its retail operations.

Los Angeles-based Carter Hawley Hale had a loss of $4.4 million for the 13 weeks ending April 30, contrasted with net earnings of $7.7 million for the same period in 1987.

Company executives said the results are not directly comparable to last year because much of the loss was due to interest on debt and costs associated with the recent split of the company. Quarterly earnings before interest and taxes increased 2.4% to $28.3 million, compared to $27.7 million in 1987.

The high interest costs stem partly from a restructuring plan under which Carter Hawley Hale last September spun off its specialty stores--Neiman Marcus, Bergdorf Goodman and Contempo Casuals--into a separate public company controlled by General Cinema Corp.

The plan left the company with the Broadway and three other department store chains--Emporium Capwell, Thalhimers and Weinstock’s.

In all, Carter Hawley Hale had interest payments of $35.6 million in the third quarter results announced Tuesday, compared to $13.9 million for the same period in 1987.

However, much of the loss during the most recent period--the third quarter in Carter Hawley’s fiscal year--was due to dropping sales. Sales for the quarter fell to $546.1 million this year from $563.7 million in 1987, a decline of 3.1%. The drop was marked by a noticeable decline in the sales of women’s apparel, an industrywide trend, Smith said.

“Hawley is a great salesman, but he can’t buck the trend,” said Robert Buchanan, an industry analyst at A. G. Edwards & Sons, in reference to Carter Hawley Hale Chairman Philip M. Hawley.

Buchanan said the spring and summer line of women’s clothing had not generated much consumer excitement, partly because many women have mixed feelings about the reintroduction of shorter hemlines.

Rising prices for women’s clothing is another major factor in the sales drop, according to Elizabeth Armstrong, an analyst at Prescott Ball & Turben.

At the Minneapolis-based Dayton Hudson, first-quarter earnings tumbled more than 19%, to $30.7 million from $38.1 million in 1987.

Overall, Penney’s earnings were up 141% from the first three months of 1987, when the company took a $140-million charge for the cost of relocating its headquarters to Dallas from New York.

However, earnings for the 1988 quarter are actually lower when compared with year-earlier earnings before the $140-million charge. Before the charge, Penney earned $136 million in the first three months of 1987, compared to $131 million in 1988.