[R]2:30PM New York – Retailers report weaker than expected same store sales gains on warmer weather in September[/R]

Apparel retailers reported mixed report of sales in the September month but several of them issued lowered sales guidance for October or reduced earnings for the quarter ending in September. Almost all the apparel retailers blamed weak performance on warm weather in the month.

Wal-Mart (WMT: chart) increased its third quarter estimates between $0.66 and $0.69 per share from $0.62 to $0.65 per share. The company also reported for the last five weeks same store sales rise of 1.4% and for the 35-weeks a gain of 1.5% excluding fuel sales. The company also guided sales rise in October between flat and 2%.

Target (TGT: chart) reported sales gain of 1.2%, below its already lowered range between 1.5% and 2.5%. The company estimates the annual earnings of below its previous estimate of $3.60 per share and issued October sales guidance of increase of between 3% and 5%.

Limited Brands, Ltd (LTD: chart) reported sales drop of 4% and said that its earnings will be below 4 cents per share in the third quarter.
The company reported comparable store sales for the five weeks ended October 6, 2007 decreased 4 percent compared to the five weeks ended October 7, 2006. The company reported net sales of $713.2 million for the five weeks ended October 6, 2007, compared to sales of $781.3 million for the five weeks ended September 30, 2006.
The company reported a comparable store sales increase of 2 percent for the 35 weeks ended October 6, 2007. Net sales were $6.213 billion compared to net sales of $5.951 billion last year. Limited now expects to report third quarter earnings per share between $0.00 and $0.04 versus its previous guidance of $0.04 per share.

J.C. Penney (JCP: chart) store sales fell 4.6% decline and lowered its third quarter earnings guidance between $1.00 and $1.04 per share from $1.28 per share.

Total department store sales decreased 1.2 percent for the five weeks ended Oct. 6, 2007. Comparable department store sales decreased 4.6 percent and total Direct sales decreased 8.5 percent, below management’s most recent guidance for a low-single digit sales increase for both. Internet sales increased 6.4 percent for the month, on top of a 36 percent increase last year. In last year’s September period, comparable department store and Direct sales increased 8.7 percent and 11.8 percent, respectively, representing one of the most difficult comparisons of the year.

Kohl’s (KSS: chart) sales declined 3.2% and lowered the earnings guidance below initial estimate between 67 and 71 cents per share.

The company reported today that sales for the five-week period ending October 6, 2007 increased 5.9 percent over the five-week period ending September 30, 2006. On a comparable store basis, sales decreased 3.2 percent.

For the 35 weeks ending October 6, 2007, total sales were up 9.2 percent over the 35 weeks ending September 30, 2006. On a comparable store basis, sales for the 35-week period increased 1.3 percent.

Larry Montgomery, Kohl’s Chairman and Chief Executive Officer, commented, “September sales were affected by weak demand in weather-sensitive businesses such as long bottoms, fleece and sweaters. We expect our third quarter earnings to be at the low end of our previous earnings guidance of $0.67 to $0.71 per diluted share.”

Nordstrom (JWN: chart) sales increased 3.2% and lowered earnings guidance for the third quarter. Preliminary quarter-to-date sales of $1.34 billion increased 7.6 percent compared to sales of $1.25 billion during the same period in 2006. Quarter-to-date same-store sales increased 4.6 percent. Preliminary year-to-date sales of $5.69 billion increased 7.2 percent compared to sales of $5.31 billion during the same period in 2006. Year-to-date same-store sales increased 6.8 percent.

‘we entered the quarter with inventory levels above our plan and our below-plan sales performance put additional pressure on inventory levels. We are taking immediate action to bring inventory levels in line, which will negatively impact merchandise margins for the remainder of the year,' commented Blake Nordstrom, President of Nordstrom, Inc.

The company's below plan sales performance combined with its higher inventory position will lower expected earnings. As a result, the company now expects to deliver third quarter earnings per share of $0.50 to $0.53, which is below its prior outlook of $0.61 to $0.64. Additionally, third quarter same-store sales are now expected to increase two to four percent, below the four to five percent range announced at the end of the second quarter.

Saks Inc (SKS: chart) reported sales totaled $307.4 million for the five weeks ended October 6, 2007 compared to $280.8 million for the five weeks ended September 30, 2006, a 9.5% increase. Comparable store sales increased 7.7% for the five-week period.

On a quarter-to-date basis, for the two months ended October 6, 2007, owned sales totaled $520.9 million compared to $458.9 million for the two months ended September 30, 2006, a 13.5% increase. Comparable store sales increased 11.8% for the two-month period.

Gap Inc (GPS: chart) reported net sales of $1.43 billion for the five-week period ended October 6, 2007, which represents a 3 percent decrease compared with net sales of $1.46 billion for the five-week period ended September 30, 2006. Due to the 53rd week in fiscal year 2006, September 2007 comparable store sales are compared to the five-week period ended October 7, 2006. On this basis, the company’s comparable store sales for September 2007 decreased 7 percent compared with a 3 percent decrease as reported in September 2006.


Gap North America reported same store sales decline of 10% and Old Navy sales declined 8%. Banana Republic and International sales declined 2%.