Retailer income drops 8.9% in quarter
By Janice Chamberlain -- Kids Today, 10/1/2006 12:00:00 AM
As juvenile home furnishings retailers head into the all-important year-end selling season, they must be crossing their fingers that the holiday period will bring them the gift of profits missing from the second quarter.
Aggregate sales for the 13 companies on this edition of the Kids Today quarterly retail scorecard grew 9.4% to $122.9 billion from year-ago results of $112.4 billion, but net income sank to $3.1 billion, off from $3.4 billion, an 8.9% drop.
While just over half — seven companies — managed to improve their profit position over the second quarter of 2005, those gains were quickly exceeded by declining profits or increasing deficits at the other six.
Wal-Mart took the biggest earnings hit, recording a 25.7% earnings decline on profits of $2.1 billion. Most of Wal-Mart's earnings problems stemmed from one-time charges related to their decision to exit the South Korean and German markets. Wal-Mart blew past the rest in dollar revenue growth, adding more than $8.7 billion to finish the latest quarter with sales registers ringing up $85.4 billion.
Toys "R" Us reduced its red ink to $110 million, compared with $359 million last year. Sears Holding may have finally gotten its arms around its Kmart-Sears, Roebuck merger, posting a profit increase of $133 million, or 82.6%, quarter over quarter.
The largest percentage gain in revenues once again belonged to Baby Universe, up 61.3% to $8.5 million from $5.3 million a year ago. The online company continues to benefit from its Jan. 13 acquisition of Posh Tots, another online retailer.
Kids Today's second-quarter retailer scorecard is based on the financial results of 13 juvenile retailers companies with fiscal quarters ending from June 30 to Aug. 26. Joining the scorecard is Big Lots, No. 14 on Kids Today's ranking of top retailers.
| 1. For department stores. 2. For U.S. stores. Includes same-store sales of 1.5% at Wal-Mart Stores and 2.6% at Sam's Club. 3. Includes same-store sales of 8.1% at Pottery Barn Kids, 2.3% at Williams-Sonoma, -0.2% at Pottery Barn and -8.6% at outlet stores. 4. Includes same-store sales of -6.3% at Sears Domestic stores and -0.6% at Kmart stores. |
|
| Retailer same-store sales | |
| J.C. Penney1 | 6.6% |
| Big Lots | 5.2% |
| Bed Bath & Beyond | 4.8% |
| Target | 4.6% |
| Wal-Mart2 | 1.7% |
| Williams-Sonoma3 | 1.2% |
| Bombay | -3.0% |
| Sears Holding4 | -3.8% |
| Pier 1 | -14.8% |
| Linens 'n Things | NA |
| Toys "R" Us | NA |
| 1. Includes 1,135 Wal-Mart stores, 2,121 supercenters and 567 Sam's Clubs in the U.S. Excludes international stores and Neighborhood Market stores. 2. Includes 2,025 U.S. stores and 377 Canadian stores. 3. Includes 587 Toys "R" Us U.S. stores, 649 Toys "R" Us international stores and 234 Babies "R" Us stores. 4. Includes 256 Williams-Sonoma stores, 191 Pottery Barn stores, 91 Pottery Barn Kids stores, 14 West Elm stores, 5 Williams-Sonoma Home stores and 16 outlet stores. 5. Includes both U.S. and Canadian stores. |
|
| Store counts | |
| Wal-Mart1 | 3,823 |
| Sears2 | 2,402 |
| Toys "R" Us3 | 1,470 |
| Target | 1,444 |
| Big Lots | 1,402 |
| Kmart | 1,398 |
| J.C. Penney | 1,021 |
| Bed Bath & Beyond | 831 |
| Williams-Sonoma4 | 573 |
| Linens 'n Things5 | 555 |
| Bombay | 472 |
| revenue in millions | net income in millions | return on revenues | |||||||
| Retailer | Qtr. ended | 2006 | 2005 | change | 2006 | 2005 | Change | 2006 | 2005 |
| Note: Figures in parentheses are losses or declines. 1. Includes non-sales income of $906 million in the 2006 quarter and $765 million in the 2005 quarter. 2. Includes net losses from discontinued operations of $901 million in the 2006 quarter and $48 million in the 2005 quarter. 3. Includes net credit card revenues of $388 million in the 2006 quarter and $323 million in the 2005 quarter 4. Includes credit and financial products revenues of $78 million. 5. Includes pretax bankruptcy recoveries of $11 million in the 2006 quarter and $15 million in the 2005 quarter and pretax non-operating income of $16 million in the 2006 quarter and $2 million in the 2005 quarter. 6. Includes pretax real estate and other income of $9 million in the 2006 quarter and $14 million in the 2005 quarter and net income from discontinued operations of $1 million in the 2006 quarter and $9 million in the 2005 quarter. 7. Includes income tax benefits of $3 million in the 2006 quarter and $84 million in the 2005 quarter. The 2005 quarter also includes a $400 million pretax charge for transaction and related costs, a $2 million pretax charge for restructuring and other charges and a $22 million pretax loss on early extinguishment of debt and contract settlement fees. 8. Includes net losses from discontinued operations of $405,000 in the 2006 quarter and $807,000 in the 2005 quarter. The 2005 quarter also includes a $6.3 million income tax benefit. 9. Includes direct-to-customer revenues of $362.2 million in the 2006 quarter and $342.1 million in the 2005 quarter. 10. 2006 figures are from the successor entity and 2005 figures are from the predecessor entity. 11. Includes income tax benefits of $24.7 million in the 2006 quarter and $3.6 million in the 2005 quarter. 12. Includes a $7.4 million income tax benefit and a $3.8 million net loss from discontinued operations. 13. Excludes the results of Bailey Street Trading from its May 2005 sale. 2005 results are restated. 14. Includes income tax benefits of $261,000 in the 2006 quarter and $4 million in the 2005 quarter. The 2005 quarter also includes a $560,000 pretax gain on the sale of assets. 15. The 2006 quarter includes a $2,000 income tax benefit and the 2005 quarter is after $36,000 in preferred stock payments. 16. Includes the results of Posh Tots from its Jan. 13 acquisition. 17. Includes a $389,822 pretax restructuring charge and a $13,000 income tax benefit. |
|||||||||
| Wal-Mart | 7/31 | $85,430.01 | $76,697.01 | 11.4% | $2,083.02 | $2,805.02 | -25.7% | 2.4% | 3.7% |
| Target | 7/29 | 13,347.03 | 11,990.03 | 11.3 | 609.0 | 540.0 | 12.8 | 4.6 | 4.5 |
| Sears Holding | 7/29 | 12,785.0 | 13,192.04 | -3.1 | 294.05 | 161.05 | 82.6 | 2.3 | 1.2 |
| J.C. Penney | 7/29 | 4,238.0 | 3,981.0 | 6.5 | 179.06 | 131.06 | 36.6 | 4.2 | 3.3 |
| Toys "R" Us | 7/29 | 2,413.0 | 2,099.0 | 15.0 | (110.0)7 | (359.0)7 | — | -4.6 | -17.1 |
| Bed Bath & Beyond | 8/26 | 1,607.2 | 1,431.2 | 12.3 | 145.5 | 141.4 | 2.9 | 9.1 | 9.9 |
| Big Lots | 7/29 | 1,056.5 | 1,000.5 | 5.6 | 4.38 | (13.8)8 | — | 0.4 | -1.4 |
| Williams-Sonoma | 7/30 | 825.59 | 776.29 | 6.4 | 35.6 | 30.8 | 15.4 | 4.3 | 4.0 |
| Linens 'n Things10 | 7/1 | 611.6 | 573.3 | 6.7 | (39.1)11 | (5.9)11 | — | -6.4 | -1.0 |
| Pier 1 Imports | 8/26 | 370.7 | 423.7 | -12.5 | (73.1) | (10.2)12 | — | -19.7 | -2.4 |
| The Bombay Company13 | 7/29 | 121.3 | 128.0 | -5.3 | (19.9)14 | (9.4)14 | — | -16.4 | -7.3 |
| Hanover Direct | 7/1 | 108.7 | 100.2 | 8.5 | 0.115 | 1.415 | -89.8 | 0.1 | 1.4 |
| Baby Universe16 | 6/30 | 8.5 | 5.3 | 61.3 | (1.2)17 | (0.3) | — | -14.1 | -6.1 |
| TOTAL | $122,923.1 | $112,397.5 | 9.4% | $3,107.2 | $3,412.1 | -8.9% | 2.5% | 3.0% | |
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