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News > Companies
Retailers post mixed 2Q
August 21, 2001: 11:57 a.m. ET

B.J.'s., Talbots, Target, Venator post gains: Staples off, Gadzooks in the red
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NEW YORK (CNNfn) - Several retailers reported mixed second-quarter results Tuesday, with Staples' earnings lower, Gadzooks posting a loss, and B.J.'s Wholesale Club, Target, Talbots and Venator Group posting gains in the period.

Retailers have been struggling as the economy slows and consumers, whose spending accounts for two-thirds of the U.S. economy, have narrowed purchases and gone bargain-hunting at discount chains for basic items.

That benefited chains such as Target and B.J.'s, which offer everyday low prices, but put pressure on specialty chains such as Gadzooks as consumers curbed apparel purchases.

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Consumers have shifted their dollars to discount chains (CNN/FILE)
Staples, the No. 2 U.S. office supply retailer behind Office Depot (OD: Research, Estimates), posted lower second quarter results on flat sales Tuesday.

Target Corp. (TGT: down $2.31 to $34.79, Research, Estimates) posted higher earnings than a year ago, but just matched Wall Street expectations as the company struggled with modestly lower gross margins due to markdowns in the sluggish economy and the summer clearance season.

Meanwhile, B.J.'s Wholesale Club reported a 17 percent increase in second-quarter earnings, in line with Wall Street forecasts, helped by strong sales of food and other consumable products.

For the quarter ended Aug. 4, B.J.'s (BJ: down $2.08 to $53.19, Research, Estimates) reported net income of $36.5 million, or 49 cents a share, up from $31.2 million, or 42 cents a share, a year earlier. Analysts on average anticipated 49 cents a share, according to earnings tracker First Call.

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Sales rose 9 percent to $1.3 billion from $1.2 billion.

For the quarter ended Aug. 4, Hingham, Mass.-based Talbots (TLB: down $2.55 to $38.00, Research, Estimates) posted net income of $17.8 million, or 28 cents a share, up from $14.6 million, or 23 cents a share, a year earlier. Analysts on average expected 27 cents a share, according to First Call.

Net sales rose 6 percent to $384.3 million from $361.2 million.

CEO Arnold Zetcher cited controlled costs and inventory management for helping drive the bottom line in the quarter.

Specialty apparel chain Gadzooks Inc. (GADZ: down $0.52 to $13.67, Research, Estimates) posted a loss for its second quarter nearly double what Wall Street had forecast as the company said sales at stores open at least a year declined.

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For the quarter ended Aug. 4, Dallas-based Gadzooks, which specializes in teen apparel and accessories, reported a loss of $1.3 million, or 14 cents a share, compared with a profit of $1.5 million, or 17 cents a share a year earlier. Analysts on average anticipated a loss of 9 cents a share, according to First Call.

Net sales increased to $72.6 million from $64.2 million.

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The company said high markdowns in the quarter eroded profit. However, the resulting inventory clearance has better positioned the company for the third quarter, CEO Jerry Szczepanski said.

Analysts expect Gadzooks to post a third-quarter profit of 13 cents a share, according to First Call.

And Venator Group Inc., operator of the Footlocker shoe and sporting apparel chain, posted higher second-quarter earnings ahead of analysts' forecasts as the company logged higher sales in the period.

Venator, which also owns San Francisco Music Box Co. and several Burger King fast food restaurants, announced plans to divest those operations and rename the company Footlocker Inc. as it focuses squarely on athletic footwear and apparel.

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The company already has shuttered its Northern Reflections stores as part of its refocusing efforts.

For the quarter ended Aug. 4, New York-based Venator reported earnings of $28 million, or 20 cents a share, up from $15 million, or 11 cents a share, a year earlier. Analysts on average anticipated profit of 17 cents a share, according to First Call.

Results include a one-time $1 million gain from real estate sales, the company said.

Sales increased 7.7 percent to just over $1 million from $944 million. graphic

  RELATED STORIES

Retailers post mixed July sales, discount chains higher - Aug. 9, 2001

Staples 2Q meets forecasts on flat sales - Aug. 21, 2001

  RELATED SITES

Staples

B.J.'s Wholesale Club

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