David Kirkpatrick

March 5, 2009

Wal-Mart has strong February

Looks like the discount powerhouse continues to makes gains in a weak economy.

People have to buy stuff somewhere and Wal-Mart is perfectly situated for an economic downturn. Either the main, or only, player in an area. One-stop shop for everything from groceries, convenience items, sporting goods, general merchandise, banking, eye care, hair salon, etc. And regardless what you think of the massive retailer, Wal-Mart does offer its customers very low prices.

From the link:

Wal-Mart Stores Inc (WMT.N) reported a higher-than-expected rise in February same-store sales and said it was raising its dividend due to the strength of its business, sending its shares 3 percent higher.

The world’s largest retailer gave an overall boost to retail sales in February and proved it is pulling further ahead of rivals like Target Corp (TGT.N).

Target posted a same-store sales decline in February, while discounter Family Dollar Stores Inc (FDO.N) said second-quarter same-store sales rose far higher than expected.

Shares of Target fell 3.3 percent, while Family Dollar surged 11 percent.

Wal-Mart also increased its annual dividend 15 percent to $1.09 per share from 95 cents per share in its most recently completed fiscal year.

“Our free cash flow remains strong enough to fund Wal-Mart’s growth around the world, make strategic acquisitions and fund returns to shareholders through dividends and share repurchases,” CEO Mike Duke said in a statement.

Wal-Mart said its February sales at U.S. stores open at least a year, or same-store sales, rose 5.1 percent as lower gasoline prices eased some household budgets.

The results far surpassed analysts’ average estimate for a 2.4 percent increase, and Barclays Capital analyst Bob Drbul said it is clear that Wal-Mart is gaining market share.

“These guys are doing a great job at their agenda, which is widening the moat” between themselves and competitors, he said. “The dividend increase is simply gravy on top of today’s announcement.”

January 8, 2009

Woolworths, RIP

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 4:25 pm

The last Woolworths stores lock the doors forever today.

From the link:

THE last remaining Woolworths stores will close their doors for the final time at the end of trading today.

The closures bring to an end a massive clearance sale which even saw the stores’ fixtures and fittings sold off at bargain prices.

The collapse leaves 27,000 workers out of work.

The firm’s 807 stores have been closing in tranches throughout the final weeks of December after selling off stock, fixtures and fittings at discount prices.

The final 200 were expected to close yesterday but administrator Deloitte gave the chain a brief reprieve to shift the remaining stock and allow final arrangements to be made.

Deloitte would not confirm how much money has been raised by the stock sale but many stores have been emptied by bargain hunters.

It has held talks with other retailers to take on the leases of around 300 Woolworths stores and hopes to sell off the Ladybird children’s clothes and Chad Valley toys brands.

Dragons’ Den entrepreneur Theo Paphitis showed an interest in buying parts of the collapsed chain but said it had not been possible to reach a deal with administrators from Deloitte.

December 28, 2008

2009 — a year of hurt for retail

Filed under: Business — Tags: , , , — David Kirkpatrick @ 6:36 pm

All aspects of retail.

From the WSJ link:

As retailers count their takings, it is becoming clear that consumers took a holiday away from retail land. And broad trends, such as free-falling house prices and rising unemployment, point to a dismal 2009 for anyone in the business of flogging stuff on shelves.

The same goes for the companies that rent them floor space. Real-estate investment trusts operating U.S. malls are especially exposed. Tighter credit has turned the screws on a sector with almost $23 billion of debt maturing over the next two years, according to real-estate consultancy Green Street Advisors, and an aggregate market value of just $17 billion. No wonder that, on average, mall REIT stocks look set to close 2008 down almost 60%.

December 8, 2008

Retail is down …

Filed under: Business — Tags: , , — David Kirkpatrick @ 4:01 pm

maybe for months? This bodes poorly for the holiday shopping season.

From the link:

The sharp slide in economic activity that began in October looks to have deepened in November,” wrote Seamus Smyth, an economist for Goldman Sachs.

Economists have been lowering their forecasts for growth in light of the sharp drop off in November. The median forecast for fourth-quarter growth is now negative 4.1%, with negative 2.9% expected for the first quarter. Most economists don’t see a rebound in growth until next summer.

November 14, 2008

Retail feeling the crunch

Aside from Wal-Mart, the retail numbers this quarter are pretty bleak and not promising to be much better over the traditional big holiday season.

Here’s an example from today — Abercrombie & Fitch:

Abercrombie & Fitch Reports Third Quarter Results;

Third Quarter Net Income of $63.9 Million or $0.72 Per Diluted Share;

Board of Directors Declares Quarterly Dividend of $0.175;

Company Provides Update for 2008

NEW ALBANY, Ohio, Nov. 14 /PRNewswire-FirstCall/ — Abercrombie & Fitch Co. (NYSE:ANF) today reported unaudited results which reflected third quarter net income of $63.9 million and net income per diluted share of $0.72 for the thirteen weeks ended November 1, 2008, compared to net income of $117.6 million and net income per diluted share of $1.29 for the thirteen weeks ended November 3, 2007.

  Third Quarter Highlights

   — Total Company net sales decreased 8% to $896.3; comparable store sales
      decreased 14%

   — Total direct-to-consumer net sales decreased 6% to $57.5 million

   — Abercrombie & Fitch net sales decreased 8% to $385.8 million;
      Abercrombie & Fitch comparable store sales decreased 8%

   — abercrombie net sales decreased 14% to $109.5 million, abercrombie
      comparable store sales decreased 20%

   — Hollister Co. net sales decreased 7% to $383.6 million; Hollister
      comparable store sales decreased 18%

   — RUEHL net sales increased 7% to $13.5 million; RUEHL comparable store
      sales decreased 25%

   — Net income for the third quarter was $63.9 million

   — Net income per diluted share in the third quarter was $0.72

Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said:

“Our third quarter financial results reflect a pull back in consumer spending and a difficult economic environment that is having an affect on all retailers.  However, during these difficult times, we remain firmly committed to the aspirational positioning of our brands, providing an unparalleled store experience for our customers and investing in initiatives that will allow us to continue the international expansion of our brands.  We are mindful of the current environment and will continue to operate the business with a seasoned and disciplined approach, looking for efficiencies within our operations.”

Update — Here’s a Wall Street Journal piece on the sector.

From the link:

U.S. retail sales took a record dive in October as consumers afraid for their jobs continued a retreat heading into the holiday shopping season and cut back spending on a wide variety of goods ranging from cars to furniture to electronics.

Separately, U.S. import prices fell at a record pace last month, further evidence that falling oil prices and the slowing global economy are having a rapid damping effect on inflation. Assuming that trend is confirmed by upcoming producer and consumer price reports, Federal Reserve policymakers should have added flexibility to address the credit crisis through liquidity programs and even more rate cuts without worrying about an inflationary outbreak.

Retail sales tumbled 2.8% last month from the previous month, the Commerce Department said Friday. It was the fourth drop in a row. Sales in September decreased 1.3%, revised down from an originally estimated 1.2% decline.

Economists expected a 2.4% drop in sales during October, the first month of the fourth quarter. The 2.8% drop was the largest since records began in 1992. The previous record was a 2.65% decline in November 2001.

Update 11/19/08 — And here more news, a bit more focused on the online retail sector, via AccountantsWorld:

The retail industry continued to see signs of a sharp pullback in consumer spending, both online and in stores.

Growth in online sales slowed to a near halt in October, comScore, a research firm, is expected to report on Tuesday. Separately, Lowe’s and Target reported Monday that third-quarter profit fell as consumers cut back on large home-improvement projects and discretionary purchases.

 

Online spending grew by only 1 percent over October 2007, comScore said. That was the lowest monthly growth rate since comScore began tracking e-commerce in 2001, and was down from 5 percent in September.

In the past, e-commerce has been somewhat protected from cutbacks in consumer spending that have affected retail stores, because online shopping was perceived as more convenient. Consumers also turned to online outlets to compare prices easily.