Many Retailers Wrap Up Big January Sales Figures

Consumers gave retailers their best month in two years in January, snapping up sale items and buying more than ever at the nation’s largest discount stores, according to analyst and company reports released Thursday.

Wal-Mart Stores Inc. achieved a crowning milestone: It has officially become the world’s largest company based on sales, passing Exxon Mobil Corp.

Same-store sales, or sales from stores open at least a year, rose 3.4% overall compared with January 2001, according to the Goldman Sachs tally of retail chain stores. Bank of Tokyo-Mitsubishi, using weighted sales figures from 72 retailers, said sales rose 5.1%, beating the bank’s forecast of a 3% gain. It was the strongest sales pace since April 2000.

Some analysts cautioned that it was too early to tell whether the reports were solid enough to foretell a turnaround in the economy, but said they were reassured things are not worsening.

Same-store sales are considered an important measure of a firm’s overall health because the number excludes new and closed stores.

As a result of strong January sales, Wal-Mart and Target Corp. said they expected to beat fourth-quarter earnings estimates. But struggling Gap Inc. posted another decline in same-store sales.

Wal-Mart posted an 8.6% gain in same-store sales compared with last year, more than double the low end of the firm’s sales target. Sales in the fiscal year ended Jan.31 were about $218 billion, topping Exxon Mobil’s $212.9 billion.

Target reported a 7.6% gain in the company’s namesake stores open at least a year, for a total sales increase of 5.8%, including the company’s Mervyn’s and Marshall Field’s department stores.

Wall Street darling Kohl’s Corp., a discount chain set to open several stores in Southern California next year, reported a same-store sales gain of 11.5%.

“Kohl’s is simply knocking the cover off the ball,” said Kevin Tawes, senior vice president of Independence Investment in Boston. “They snatched up--at bargain prices--inventory that department stores turned back. They then got it into their stores at the right price and consumers came in droves.”

Warehouse club chains were standouts in January, particularly Costco Wholesale Corp., which had a 7% rise in same-store sales.

Typically a clearance period for most retailers, January sales can be deceptive as stores that had strong sales of full-price merchandise in December are left with little to compete in the way of markdowns. That could mean low January sales numbers but better-than-expected December profits.

“January is a real tough month to gauge and truthfully it doesn’t mean a whole heck of a lot to retailers,” said Eric Beder, an analyst with Ladenberg, Thalmann & Co.

Even department stores did better than expected in January, though most reported sales dips.

Federated Department Stores Inc., parent of Macy’s and Bloomingdale’s, said sales fell 8.8%. May Department Stores Co. said same-store sales slumped 10.7%.

But some specialty retailers, such as women’s clothing chain AnnTaylor Stores Corp., bucked the trend of weak apparel sales.

AnnTaylor boosted its fourth-quarter earnings outlook and said January same-store sales rose 14.6%. The company’s stock surged $2.86 to $40.94 in New York Stock Exchange trading Thursday.

Fellow apparel seller Limited Inc. reported a 6% sales increase.

Gap, however, continued to suffer, with its 23rd month of declining same-store sales. Sales fell 16% in January, worse than analyst estimates of a 10% to 15% drop.

The firm said same-store sales fell 22% at Gap, 14% at Old Navy stores and 7% at Banana Republic.

Gap, which earlier reported a loss of 6 cents in the third quarter, said it expects to post a fourth-quarter loss of 3 cents to 5 cents a share. The third-quarter loss was the company’s first quarterly loss in at least 10 years.

Gap stock Thursday rose 20 cents to $13.10 on the NYSE. Target lost 50 cents to close at $42, Wal-Mart fell 49 cents to $58.39 and Kohl’s gained 12 cents to $67.20, all also on the NYSE.

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Bloomberg News and Times wire services contributed to this report.