Home Depot, Dayton Hudson Post Strong Earnings
Two of the nation’s largest retailers--Home Depot Inc. and Dayton Hudson Corp.--reported strong fiscal second-quarter earnings on Tuesday, as the robust economy boosted sales.
Limited Inc., the nation’s largest apparel retailer, and several of its rivals also posted healthy results, in part because they offer their mainstay customers the styles they want, allowing the chains to sell more items at full price. In recent years, the chains also have cut costs by streamlining how they distribute and track inventory.
J.C. Penney Co. didn’t fare as well. The nation’s fourth-largest retailer posted a 7.6% drop in profit to $97 million, or 35 cents a diluted share, as sluggish sales forced it to mark down prices at its department stores. Penney’s revenue inched up 1.7% to $6.76 billion.
Home Depot, the top seller of home-improvement supplies, said net income rose 30% to $467 million, or 31 cents a diluted share, beating analysts’ forecasts by a penny. Revenue jumped 24% to $8.14 billion, and sales at stores open at least a year grew 7%.
Dayton Hudson, the fifth-largest U.S. retailer, said net income rose 26% to $172 million, or 36 cents a diluted share, a penny higher than the average estimate of analysts.
Higher sales at the Target discount chain, which generates up to 75% of the company’s revenue, and at Dayton’s, Hudson’s and Marshall Field’s department stores, offset lower profit at the Mervyn’s mid-price chain.
Revenue was up 12% to $7.06 billion, and sales at stores open at least a year rose 5.2%.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
RETAILING:
* HomeBase Inc. said its net income rose 24% in the fiscal second quarter to $14.7 million, or 32 cents a share, from pro forma income from continuing operations of $11.9 million, or 31 cents a year ago. The Irvine-based home-improvement retailer said last year’s income from continuing operations before extraordinary items was $11.2 million, or 31 cents per diluted share. Sales edged up 1% to $424.6 million, and same-store sales were up 1.5%.
The retailer said the results are not directly comparable because of changes to the company’s capital structure and nonrecurring charges related to the spinoff of BJ’s Wholesale Club Inc. in July 1997.
* Limited, the nation’s largest apparel retailer, said its profit grew 27% to $31.8 million, or 13 cents a diluted share, matching forecasts. Sales at its stores, which include Express, Lane Bryant and Victoria’s Secret, edged up 3% to $2.08 billion. Same-store sales rose 6%.
* Proffitt’s Inc. said its fiscal second-quarter profit rose 55% to $18.6 million, or 20 cents a diluted share, a penny higher than estimates, as revenue rose 5.6% to $777.1 million. The department store operator’s same-store sales rose 4%.
* Ross Stores Inc.’s net income rose 16% to $32.4 million, or 67 cents a share, matching analysts’ forecasts, from $28 million, or 55 cents, a year earlier. Sales jumped 9.4% to $537 million, and same-store sales rose 4%.
* TJX Cos. said net income climbed 61% to $84.9 million, or 25 cents a share, exceeding estimates by 2 cents. The operator of the off-price chains T.J. Maxx and Marshalls said sales rose 9.8% to $1.86 billion, and same-store sales gained 7%.
* AnnTaylor Stores Corp.’s profit rose sevenfold to $7.04 million, or 27 cents a share, from $985,000, or 4 cents, a year ago, meeting expectations, as more women paid full price for the company’s clothing and accessories. The upscale retailer’s sales jumped 21% to $223.4 million, and same-store sales surged 10.5%.
* Talbots Inc. reported net income of $1.3 million, or 4 cents a share, compared with a loss of $11.5 million, or 35 cents, a year earlier as it sold more clothes at full price. The retailer, which informed investors on Aug. 6 that it would report an unexpected profit for the quarter, was expected to earn 2 cents, according to analysts. Revenue rose 9.3% to $267.7 million as same-store sales rose 3.8%.
OTHER INDUSTRIES:
* Deere & Co. said its fiscal third-quarter net income rose 15% to $290.8 million, or $1.19 a diluted share, meeting expectations, on higher demand for construction machinery and cost reductions. Revenue rose 7.7% to $3.69 billion.
* Eaton Vance Corp.’s fiscal third-quarter earnings rose 30% to $13.6 million, or 36 cents a diluted share, from $10.5 million, or 27 cents, a year ago, as revenue jumped 30% to $67 million. The investment company’s figures were adjusted for a 2-for-1 stock split to take effect Sept. 1. Analysts had forecast 66 cents a share, not reflecting the split. Assets under management climbed 31% to $27.5 billion.
* Estee Lauder Cos. said its fiscal fourth-quarter earnings rose 20% to $44 million, or 32 cents a share, beating forecasts by a penny. The cosmetics company’s sales rose 8.9% to $845 million, with particular strength in its fragrances.
* Medtronic Inc.’s fiscal first-quarter earnings rose 2.6%, as projected, to $150.4 million, or 32 cents a diluted share. The pacemaker manufacturer’s sales edged up 1.1% to $653.2 million. The company has been hurt by its lack of a dual-chamber heart defibrillator in the U.S., as rivals such as Guidant Corp. have seen sales of the devices rise faster than expected.
* Reader’s Digest Assn. Inc. reported a profit of $5.4 million, or 5 cents a diluted share, compared with a loss of $600,000, or 1 cent, a year ago, missing estimates by a penny. Revenue fell 2% to $624.3 million. The publisher of the world’s most widely read magazine cited the strong dollar and a decline in response to direct mailings for the weak results.
