Retailers clobbered in February Mighty Wal-Mart posts zero gain

March 05, 1993|By Michael Dresser | Michael Dresser,Staff Writer

The American consumers' post-election party ended last month with a hangover for retailers.

February sales reported by major retailers yesterday looked terrible. They were so bad that mighty Wal-Mart Stores, which routinely reports double-digit gains in stores that have been open a year or more, posted a big goose egg last month.

Even at that, the nation's No. 1 retailer was fortunate. Many retailers posted negative numbers.

The consolation was that February is a relatively insignificant month in the retail calendar. It's also a month for which retailers can blame their favorite scapegoat -- the weather -- with far more credibility than usual.

In the Northeast, several February weekends were more suited to sledding than shopping, while California splashed through its rainiest winter in many years. Meanwhile, sales were being compared with an unusually mild February last year.

zTC "Sales were strong in February until the end, when the weather hurt us," said A. N. Petraglia, the Columbia-based district manager for the nation's No. 2 retailer, Kmart Corp., which eked out a 1.1 percent gain in same-store sales.

But weather alone doesn't explain the weakness. It was a month, said Derby Securities retail analyst Otto Grote, when "everything that could go wrong did go wrong." That included the calendar itself, which awarded this February one fewer Saturday than 1992, a leap year.

Even aside from that, Mr. Grote said, February last year was "a fabulous month," setting up a difficult comparison.

Kenneth M. Gassman Jr., retail analyst for Davenport & Co. in Richmond, Va., identified the chief party pooper as President Clinton, whose election in November had helped spark a holiday season shopping spree that lasted through January. But he said retailers told him Mr. Clinton's televised address to the nation two nights before his State of the Union address was the equivalent of an upstairs neighbor threatening to call the cops in the middle of the celebration.

"Consumer spending dropped sharply the following day, and it stayed soft," said Mr. Gassman.

Others, however, were skeptical of that premise. Several retail executives in the Baltimore-Washington region said they had seen no adverse reaction to the Clinton program.

"I didn't see any significant change in buying patterns," said Mel Herman, president of the Columbia-based Chesapeake Knife & Tool retail chain.

Whatever the reason, February was a month many retailers will be glad to forget. Woolworth's domestic same-store sales fell 3.4 percent, while Limited Inc. reported a 6 percent decline. Limited fell $1.125 a share, to $24.375.

Joppa-based Merry-Go-Round Enterprises, a nationwide apparel chain, showed a 5 percent drop, but that bad news was ameliorated by the company's strong fourth-quarter earnings report yesterday. The company showed a turnaround from a 5-cent-a-share loss last year to a 26-cent-a-share gain.

Hechinger Co., the Landover-based home improvement chain, reported a 6 percent decline in same store sales compared with its strongFebruary 1992 performance.

A few hot-performing retailers managed to buck the trend of weak February sales. Starbucks Corp., the Seattle-based coffee merchant, brewed up a 21.1 percent same-store increase. Heilig-Meyers Co., a Richmond-based home furnishings retailer, tallied an 8.8 percent gain.

Still, the number that stood out most was Wal-Mart's 0.0 percent gain.

Merry-Go-Round Enterprises Inc.

.. .. .. .. .. .. .. .. .. ..Ticker.. .. .. .. .. .. .. ..Yesterday's

.. .. .. .. .. .. .. .. .. . Symbol.. .. .. ... .. ... ... Cls.... ...Chg.

.. .. .. .. .. .. .. .. .. .. MGR .. .. .. .. .. .. .. .. 13 1/4 .. .. .. .+ 3/8

Period ended

Jan. 30 .. .. .. .. .. .. .. 4th qtr.. .. .. .. Year ago.. .. .. .. Chg.

Revenue .. .. .. .. .. .. .. $294,684 .. .. .. .$250,048 .. .. .. ..+17.9%

Net Income .. .. .. .. .. ...$13,995.. .. .. .. ($2,507).. .. .. .. .. --

Primary EPS .. .. .. .. .. .. .$0.26.. .. .. .. ($0.05).. .. .. ... .. --

.. .. .. .. .. .. ..Year.. .. .. .. ..Year ago.. .. .. .. .. .. Chg.

Revenue .. .. .. .. $877,499.. .. .. $761,163 .. .. .. .. .. ..+15.3%

Net Income .. .. .. $37,980.. .. .. ..$22,704 .. .. .. .. .. .. +67.2%

Primary EPS .. .. .. $0.71.. .. .. .. $0.43 .. .. .. .. .. .. +65.1%

Figures in thousands (except per share data.)

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