Retailers’ Quarterly Profits Beat Forecasts
Home-improvement retailer Home Depot Inc. and Dayton Hudson Corp., owner of Target stores, led retailers reporting higher fiscal first-quarter profit Tuesday, as the economy lifted sales of everything from flooring to fashions.
Staples Inc., the No. 2 office-supplies retailer and luxury jeweler Tiffany & Co. also reported higher earnings. Results at all the retailers beat forecasts.
“Because of consumer confidence and the favorable consumer spending climate, retailers were able to get by with fewer markdowns and sell all different types of products,” said Kurt Barnard, president of Barnard’s Retail Trend Report.
Of the 97 retailers that have reported results so far this quarter, 72% beat forecasts while 16% matched, said Chuck Hill, director of research at First Call Corp.
AnnTaylor Stores Corp., which sells women’s career apparel, meantime, said its net income more than doubled as the retailer cut costs and sold more of its career fashions at full price. It matched recently raised forecasts.
* Atlanta-based Home Depot’s net income surged 45% as housing sales fueled demand for flooring, paint and other remodeling supplies.
Net income rose to $489 million, or 32 cents a share, from $337 million, or 22 cents, a year earlier. It beat by 4 cents the average estimate of analysts for the period ended May 2. Revenue rose 26% to $8.95 billion.
Home Depot has beaten profit forecasts five quarters in a row and 15 out of the last 21, according to First Call.
* Earnings at Minneapolis-based Dayton Hudson, the fifth-largest U.S. retailer, rose 21% as shoppers scooped up clothes, snacks and home decorations at its Target discount stores.
Net income rose to $194 million, or 41 cents a share, from profit from operations of $160 million, or 34 cents, a year earlier. It was forecast to earn 39 cents. Sales surged 14% at Target, which accounts for about three-fourths of the company’s revenue. The discount chain outstripped the gains at Dayton Hudson’s other chains, including the Dayton’s, Hudson’s and Marshall Field’s department stores and its Mervyn’s mid-price chain.
Revenue for the quarter ended May 1 rose 12% to $7.21 billion from $6.47 billion.
* Net income at Staples rose 47% on higher sales in North America. Net income rose to $50.3 million, or 11 cents a share, from $34.1 million, or 8 cents, a year earlier. The Westborough, Mass.-based retailer was expected to earn 10 cents.
Sales rose 24% to $2.07 billion from $1.67 billion on the expansion of copy centers at its stores, its Quill catalog business’ move into Britain. and more Internet transactions.
* Tiffany, the No. 2 jewelry chain, said profit rose 45% on strong sales in the U.S., Japan and Europe. Net income for the quarter ended April 30 rose to $16.2 million, or 44 cents a share, from $11.1 million, or 31 cents, a year earlier. That beat the 39-cent average estimate. Revenue rose 20% to $272.3 million from $226.2 million.
* Net income at AnnTaylor rose to $14.8 million, or 51 cents a share, from $6.4 million, or 25 cents, a year earlier. Sales rose 26% to $249.4 million from $198.2 million.
New York-based AnnTaylor said on May 6 that it expected to earn 51 cents, rather than the 44 cents that analysts estimated, as a return to classic fashions and neutral colors proved popular with customers.
