Major Retailers Report Improved Sales : Results Suggest Upswing in Women’s Apparel, Analysts Say
The nation’s leading retailers Thursday reported improved sales for October, suggesting that women are returning to the stores after spurning the miniskirts and casual fashions offered last year. However, consumers still spent gingerly on other merchandise, general retailers reported.
“There was some gradual improvement in the pace of sales from August and September with particular strength noted in some of the apparel categories,” said Jeffrey Feiner, a retail industry analyst with the investment firm Merrill Lynch & Co.
But, he added, “we still characterize the overall retail environment as somewhat sluggish and don’t expect any significant improvement going into this important Christmas selling season.”
Jeffrey Edelman, an analyst with Drexel Burnham Lambert Inc., found the October sales disappointing. “The numbers were a little below expectations, not indicative of any real sell-through,” he said.
Several analysts contended that October’s results looked better than they really were because they were being compared to the very weak sales of a year earlier.
However, Walter Loeb, an analyst with Morgan Stanley & Co., saw cause for optimism.
“Sales were pretty good,” said Loeb, who described himself as “very pleased” by the figures.
“I don’t see any reason to compare (the sales) with last year” because most of the weakness in October, 1987, came in the week following the stock market crash, he said.
“I think Christmas will be quite substantial,” Loeb said.
“The results bode well for retailers, and especially for those exposed to women’s apparel,” said David Williamson, a securities analyst with Advest Inc. “Women’s apparel is the highest profit margin inventory in the stores and we could see good results the third and fourth quarters.”
Analysts and retailers reported improvement in apparel sales, which have been in a slump since August of last year because of women’s reluctance to buy shorter skirts and clothes that they felt were boring. Clothing sales had shown some signs of life in September, boosting hopes that a recovery was finally under way.
Limited Inc., a leading specialty apparel retailer, reported its overall October sales rose 20% while sales at stores open at least a year--known as same-store sales in the industry--picked up 15%.
“They’re finding their way, they’re changing their merchandise, they’re changing the stores,” said Fred Wintzer, an analyst with Alex. Brown & Sons Inc. in Baltimore.
“We’re starting to see some pickup at the rest” of the apparel retailers, Wintzer said, but he also warned that the sales, when compared to year-earlier results, look stronger than they really were.
Beyond the fashion troubles, retailers in general have suffered through sluggish sales for more than a year and a half as consumers paid more for necessities and services and tried to pay down their high debt levels.
Several retailers continued to report sales gains well under the rate of inflation, which has increased by 4.5% so far this year.
The nation’s largest retailer, Sears, Roebuck & Co., which earlier this week announced a restructuring and overhaul of its selling strategy, said its overall sales were up 7.5% last month and 5.9% for the first 39 weeks of the fiscal year. Sears’ same-store sales rose 2.5% in October and 2% for the year so far.
Retailers and industry analysts believe that same-store sales are considered the most accurate index to compare a retailer’s year-on-year performance because they exclude the sales of stores open less than a year. However, not all retailers report both overall and same-store results.
K mart Corp. said its overall sales rose 5.8% in October and 5.7% for the first 39 weeks of the year. The company’s same-store sales rose 1.8% for the month and 2% for the year to date.
Wal-Mart Stores Inc. reported its overall sales were up 24% last month and 29% so far this year. Its same-store sales were up 9% for the month and 11% for the year to date.
J. C. Penney Co. said its overall sales rose 8.1% last month, and 0.4% for the year so far. Its same-store sales were up 6.9% in October, but fell 0.7% over the 39 weeks.
Dayton Hudson Corp. said its overall sales rose 8.8% last month, and 16% for the 39-week period. Same-store sales were up 1% in October and 1.7% for the year to date.
Carter Hawley Hale Stores Inc. said its October sales increased 4.4% from a year ago. Same-store sales rose 3.3%. For the 39 weeks ended Oct. 29 total sales rose 1% and same store sales were up 0.6%. Carter Hawley said results were hurt by sluggish women’s apparel sales.
May Department Stores Co. reported a 22.8% jump in overall sales in October and a 15.4% rise so far this year. May’s same-store sales were up 3.7% last month and 1.8% for the year to date.
Montgomery Ward & Co. reported a 3.2% rise in October sales, and a 3.1% pickup during the 39-week period.
F. W. Woolworth Co. said its October sales rose 11.7%, while year-to-date sales improved 12.1%.
The results reported Thursday were from the biggest general merchandise and apparel retailers. Unlike monthly retail sales figures released by the federal government, they do not include sales at auto dealers, supermarkets or restaurants.
MAJOR RETAILERS’ SALES IN OCTOBER
In millions % of dollars 1988 change Sears 2,518 +7.5 K mart 1,965 +5.8 J.C. Penney 1,166 +8.1 May Dept. Stores 872.3 +22.8 Dayton Hudson 882.4 +8.8 Wal-Mart Stores 1,800 +24.0 Woolworth* 330.0 +11.7 Montgomery Ward 348.3 +3.2 Carter Hawley Hale 200.7 +4.4
* Excludes foreign sales.
Several top retailers do not report their sales monthly: Federated Department Stores Inc. and Allied Stores Corp., the Campeau Corp. units which together comprise the nation’s fourth largest retailer based on 1987 sales; R. H. Macy & Co., which is the 10th largest, and Batus Inc., the 15th largest.
