Wal-Mart downbeat after poor sales
Forecast at low end of expectations
Wal-mart has sounded another cautious note on US consumer confidence, warning that it expects third quarter earnings to be at the low end of forecasts after August sales disappointed.
The world’s biggest retailer said that US same store sales in August grew by only 0.5 per cent, below the 2 to 4 per cent the company had forecast. Sales were lower after demand for back-to-school ranges fell short of forecasts.
As a result, its third-quarter forecast for same-store US sales growth has been reduced to 2 to 4 per cent from a previous forecast of 3 percent to 5 percent.
Wal-Mart’s total sales in the four weeks to August 27 rose 8.8 per cent to $21.2bn.
The consumer downturn in the US appears to have been widespread. Upmarket retailer Federated Department Stores, operator of the Macy’s and Bloomingdale’s chain had total sales of $1.047bn for the four weeks to August 28. This is a decrease in total sales of 2.7 per cent, with a 4.4 per cent same-store decline.
[img r]macys2.jpg[/img]Terry Lundgren, Federated’s chairman, president and chief executive officer, also cited weakness in back-to-school clothing sales, as well as in furniture.
As with Wal-Mart, August sales in Florida stores were hit by the Aftermath of Hurricane Charley.
Lundgren said: “Additionally, because August is a clearance month, tight seasonal inventories in our stores are reflected to some degree in our weaker-than-anticipated sales during the month.”
Tracy Mullin, president of the US Ntational Retail Federation, said: “The impact of Hurricane Charley and the uneven pace of back-to-school sales has retailers reporting mixed results. Retailers’ saving grace may be inventory levels, which have been kept under control and are helping stores focus on moving fall merchandise.”
