Hechinger sales in May decreased 3 percent

June 03, 1994|By Jay Hancock | Jay Hancock,Sun Staff Writer

Cold, wet weather last month over much of the East kept consumers from buying lawn fertilizer, flower flats and other yard products, hurting sales at Hechinger Co. during one of its most important months.

Sales in stores open for at least a year fell by 3 percent compared with results in May 1993, Hechinger said yesterday.

May and June normally are the Landover-based company's biggest months for revenue.

Same-store sales are considered an important measure of retail strength because they discount revenue increases generated by new locations.

The May results weren't surprising, said Neal Kaplan, retail analyst for investment house Scott & Stringfellow Inc. in Richmond, Va. "Lawn and garden is very weather sensitive," he said, adding that the company should be able to recover some of the lost sales.

But Lynn Sawyer, an analyst with NatWest Securities Corp. in New York, said bad weather for May "is only a partial excuse. It's a factor, but the numbers are still a little weaker than I would have thought."

Hechinger is subject to intense competition from Home Depot Inc. and other home-center chains in many of its markets.

Richard S. Gross, Hechinger's corporate controller, said May sales improved as the month lengthened and the weather became warmer. And, he added, same-store sales increased, not including lawn-and-garden and other seasonal products.

Despite the sales dip, Mr. Kaplan said he was maintaining earnings estimates of 47 cents a share for the current quarter and 85 cents for the year. Ms. Sawyer said she would re-examine her estimates after speaking with Hechinger managers.

Hechinger's Class A shares closed unchanged yesterday, at $15.25 a share. Class B shares closed at $14.75, down 50 cents. Overall, Hechinger Co. sales for May rose 10 percent, to $235.3 million.

Same-store sales in the company's Hechinger division, whose stores are concentrated in the Washington, Baltimore and Philadelphia areas, fell by 4 percent. Sales in Hechinger's Home Quarters division fell by 2 percent.

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