Most Recent Articles In Fashion Features
Latest Fashion Features Articles
Describing the quarter as “interesting,” Wal-Mart grew earnings 14.1 percent to $1.86 billion, or 42 cents a share. Sales rose 9.8 percent. Penney’s, which had a “difficult” quarter, saw overall earnings plummet 29.1 percent to $61 million, or 20 cents a diluted share, while the topline shrunk by 3 percent. May Co.’s profits inched up 2.9 percent to $72 million, or 23 cents a diluted share, while sales retreated 7.2 percent.
Of May Co.’s 1 percent increase in inventory despite a sales decline, Goldman Sachs analyst George Strachan wrote in a research note, “We believe that inventory is well controlled and that hard markdowns have been taken to shield future quarter results. As a result, May is well positioned to benefit from an eventual topline recovery.”
However, UBS Warburg’s Linda Kristiansen took an opposing view, saying that May Co.“was not particularly proactive in taking early markdowns” and that further promotion will be necessary to bring comp-store stocks in line with planned same-store sales declines of between 2 and 4 percent in the second quarter.
The lagging sales aren’t necessarily a bad sign for everyone, though. Off-pricer TJX Cos. said the inventory glut allowed it to pump up merchandise margins by taking advantage of in-season buying opportunities. However, the firm posted a 22.8 percent drop in first-quarter net income to $113.5 million, or 22 cents a diluted share, on a 4.6 percent upswing in sales.
For the most part, investors didn’t look favorably on the results, with the notable exception of Penney’s, which received a 5.4 percent boost in its share price to $18.85. Wal-Mart’s stock fell 2.1 percent to $55.49 while May Co.’s was off 1.9 percent to $22.17, while shares of TJX fell 1 percent to $19.80. All four issues trade on the New York Stock Exchange.
WAL-MART STORES INC.
Even the mighty Wal-Mart endured “disappointing” sales in the first quarter.
Still, president and chief executive Lee Scott, on a recorded conference call, was comfortable enough with the results to declare, “We had a heck of a good quarter from an operating perspective.”