Hoisted by a hot summer climate,earnings for mass merchandisers are recovering from the recent recession with rising margins and estimates. Retailers Kohl’s and Dollar General reported double-digit comps for June, with same-store sales growth up 14.8% and 11.8% respectively. The Target Stores division of Target Corp. reported comps up 6.1%, while rival Wal-Mart Stores reported comps up 8.7% at its U.S. Wal-Mart locations.
"According to our weather consultant, Planalytics, weather should continue to be favorable during the first two weeks of July, with above normal temperatures throughout much of the United States especially on both coasts," said Merrill Lynch first vice president Daniel Barry. "Overall, they believe that July should be a very strong month, the strongest July in four years. June weather was nearly as favorable as May’s weather was unfavorable."
More warm weather can only mean goodfor the segment’s largest players — Target and Wal-Mart. Minneapolis-based Target Corp.’s net sales for June increased 13.6% to $3.833 billion. Comp store sales for the company as a whole increased 4.9% from fiscal June 2001. The exceptional strength of the company’s Target Stores division continues to make up for laggard department store divisions Marshall Field’s and Mervyn’s, which posted comp store sales down 2% and 0.1% respectively.
Bentonville, Ark.-based Wal-Mart Stores Inc. reported June sales of $23.347 billion, up 13.8% from 2001. The company’s Wal-Mart division posted a gain of 16% to $13.41 billion, while its Sam’s Club division posted a 10.1% gain in sales to $3.131 billion for June 2002.