Many Retailers Post Big Gains in Third Quarter

Home Depot Inc., Limited Inc. and Dayton Hudson Corp. reported big gains in fiscal third-quarter profits, along with several other retailers, as the strong economy fueled sales of everything from tools to housewares to clothing.

Earnings at many retailers also got a boost from better gross margins, which measure the profitability of sales.

Department store chain J.C. Penney Co., however, said its profit fell 24%, to $142 million, or 51 cents a share, as it continued to lose shoppers to other chains. Sales, including its Eckerd drugstores, rose 5.7% to $7.98 billion.

Of the 59% of retailers that have reported quarterly earnings so far, 63% exceeded analysts’ estimates, 25% matched and 12% missed, according to First Call Corp.

Home Depot, the largest retailer of home improvement goods, said net income rose 46% to $573 million, or 37 cents a share, as sales grew 28% to $9.88 billion. Sales at stores open at least a year jumped 10%, topping the company’s August forecast for a gain at a high single-digit percentage rate.

* Limited, the nation’s largest apparel retailer, said net income increased 16% to $40.8 million, or 18 cents a share, as sales rose 6% to $2.02 billion at its Express, Lane Bryant, Lerner New York and Structure chains. The results exceeded the 15-cent average estimate of analysts polled by First Call.

* Dayton Hudson’s operating earnings jumped 32% to $241 million, or 52 cents a share, as healthy profit growth at its Target discount chain offset a decline at its Mervyn’s stores and flat performance at the department store division. Sales rose 10% to $8.01 billion, led by a 14% jump in sales at Target.

At a Glance

Other retail earnings, excluding one-time gains or charges unless noted, include:

* AnnTaylor Stores Corp.’s earnings jumped 52% to $21.4 million, or 65 cents a share, on a 20% rise in sales to $272.3 million, helped by strong demand for fall fashions. Analysts were expecting 60 cents a share until Nov. 4, when the company’s bullish outlook guided them to push estimates to 65 cents.

* American Eagle Outfitters Inc.’s profit soared 75% to $24.3 million, or 50 cents a share, well above analysts’ estimates of 43 cents, as sales climbed 49% to $222.7 million.

* Longs Drug Stores Corp. said its net income rose 13% to $12.4 million, or 32 cents a share, as sales grew 7% to $867 million. Same-store sales rose 6%, led by a 13.7% rise in same-store pharmacy sales.

* Staples Inc., the second-largest seller of office supplies, said net income rose 34% to $92.5 million, or 20 cents a share, from $69.2 million, or 15 cents, a year ago on a 25% jump in sales to $2.37 billion.

* TJX Cos., whose off-price chains include T.J. Maxx and Marshalls, said profit increased 17% to $157 million, or 50 cents a share, a penny higher than estimates. Sales rose 11% to $2.26 billion, with all units contributing.

* Tiffany & Co.’s profit climbed 81% to $22 million, or 29 cents a share, beating estimates of 25 cents, as sales at the upscale retailer jumped 28% to $322.7 million. Sales at U.S. stores open at least a year soared 22%.

* Williams-Sonoma Inc. said its earnings jumped 85% to $9.24 million, or 16 cents a share, on increased sales of kitchen and home goods at its namesake, Pottery Barn, Hold Everything and Chambers stores. The San Francisco-based company said net sales grew 34% to $241 million.