Sales Slump at Year's End

New York — The retail year ended pretty much the same way the holiday season started: with a "hard times" feel for major department store chains and discounters alike, but with bright spots for the off-price giants and warehouse clubs.

It was no surprise to most when in February three retailing behemoths — JCPenney, Macy's and Sears Holdings — each announced streamlining and restructuring steps while pledging to find their way to renewed profit growth in the coming year.

The comp-store gain in January was 0.2% at U.S. Wal-Mart stores, while Sam's Club had a 4.9% gain (more than half from fuel sales). For the year, U.S. Wal-Mart stores were up 0.9% in comps, while Sam's surged 4.9%. The U.S. gain overall was 1.5%, or 1.4% minus the fuel sales impact.

The story at Target was a 1.1% comp drop for January, "near the lower end of our planned range," said chairman and ceo Bob Ulrich.

JCPenney reported a 1.9% comp sales falloff for the month, compared to guidance for a mid-single digit decrease; "home and jewelry" were cited as the weakest categories.

Macy's, which reported its January sales a day early along with its restructuring announcement, saw monthly comps fall 7.1%, well below the retailer's guidance of a comp drop of 4% to 6%.

In a mixed picture at Bon-Ton Stores, its Carson's division saw comps fall 3.2%, while the Bon-Ton unit showed a 2.4% comp rise; overall the company reported a 1.3% comp drop.

Off-price leader TJX Companies posted a solid 3% comp gain for the month, good enough for president and ceo Carol Meyrowitz to offer: "We now expect fourth-quarter earnings per share from continuing operations to be near the high end of our previously anticipated range of $0.60 to $0.63. We enter the spring selling season in an excellent position to drive sales, with great liquidity in our inventories."

Off-price challenger Ross Stores achieved a 1% comp rise, and noted, "Based on favorable gross margin and expense trends," that quarterly earnings per share "will be $0.69 to $0.70," up from previous guidance of $0.68 to $0.69.

Measured by the Johnson Redbook Same Store Sales Index, comp store sales were up 0.3% in January, following a 0.6% drop in December, which came after a 4.2% gain in November.

Department store operators were particularly hard-pressed to show positive comps, with Redbook citing a 5.6% drop for the segment. Discounters managed a 1.4% comp sale rise for the month, which ended Saturday, Feb. 2.

Of the 45 retailers covered in its Index, Redbook noted that Dillard's and two specialty chains saw double-digit comp drops for the month. More than half the covered chains, 53%, reported negative comps.