March Sales a Mixed Bag for Big-Box Retailers

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March Sales a Mixed Bag for Big-Box Retailers

Despite the dicey economy and an Easter that fell late in the year, March wasn’t all bad news for big-box retailers. Some modest increases in net and comparable-store sales were logged during the month. Still, results were rather uneven, although in line with most companies’ expectations.

BJ’s Wholesale Club, Inc. reported that sales for March 2009 grew by 1.7 percent to $870.3 million from $855.9 million in March 2008. However, comparable-club sales for March 2009 declined by 0.1 percent, including a negative impact from sales of gasoline of 8.6 percent. Excluding the adverse effect of gas sales, merchandise comps rose by 8.5 percent. A calendar shift in the timing of Easter had a positive impact on comps sales of about 2.0 percent.

By comparison, for March 2008, the Natick, Mass.-based retailer posted comparable-club sales growth of 6.0 percent, including a positive impact from gasoline sales of 3.4 percent. A calendar shift in the timing of pre-Easter holiday sales vs. March 2007 had a negative impact on comps of about 2.5 percent to 3.0 percent.

Food sales rose by about 11 percent, while general merchandise sales increased by about 4 percent for the month. Departments with the strongest sales increases over last year included breakfast foods, candy, canned fruits and vegetables, cigarettes, computer hardware and software, dairy, deli, frozen foods, health and beauty aids, household chemicals, housewares, meat, paper, pasta and pasta sauces, pet foods, prepared foods, produce, small appliances, snacks, televisions and video games. Among the weaker departments vs. last year were apparel, eggs, jewelry, prerecorded video, sporting goods, storage, summer seasonal, trash bags and water.

For the five-week period ended April 3, 2009, Wal-Mart Stores, Inc. reported net sales increases of 2.6 percent for Walmart U.S. and 2.2 percent for Sam’s Club, while International and total company sales declined 14.8 percent and 1.9 percent, respectively. Comps grew 0.6 percent (no fuel impact) for Walmart U.S.; 6.2 percent for Sam’s Club (-4.9 percent with fuel impact) and 1.4 percent (-0.7 percent with fuel impact) for the total U.S.

"Wal-Mart is maintaining strong price leadership and expense management," said Tom Schoewe, EVP and CFO of the Bentonville, Ark.-based mega-retailer. "We believe earnings per share from continuing operations for the first quarter will be toward the high end of the range we provided in February, 72 cents to 77 cents per share."

Weak nonfood sales and dropping gas prices were behind a 2 percent drop in U.S. same-store sales at Issaquah, Wash.-based Costco Wholesale Corp., which saw net sales of $6.39 billion for the five weeks ended April 5, a decrease of 3 percent from last year’s $6.57 billion.

According to the retailer, this year's five-week period included 35 days of sales compared with 34 last year, reflecting the timing of Easter. This calendar shift positively impacted this year's total and comparable sales by approximately 1 percent to 2 percent.

Costco is up for the year, however, with year-to-date net sales of $41.47 billion for the 31-week period ending April 5, compared to $41.34 last year.

Meanwhile, Target Corp.’s same-store sales declined 6.3 percent in March, a tad better than Wall Street expectations, due in part to improvements in the discounter’s business segments.

Total sales for the five-week period ended April 4 dipped 2.3 percent to $5.5 million from $5.7 million last year. The Minneapolis-based chain’s same-store sales fell 5.3 percent year-to-date, while total sales have declined 1.3 percent so far this year.

"March sales were modestly better than our planned range, and reflected the adverse impact of the move of pre-Easter holiday shopping days from March last year into April this year," said Gregg Steinhafel, Target’s chairman, president and CEO. "Our guests continue to be cautious, but we have begun to see encouraging signs in the operating results of both of our business segments. In light of the Easter shift and recent trends, we expect our April reported comparable-store sales results to be essentially flat to last year."