Tax Rebates Boost Wal-Mart Sales
July is shaping up as a good month for the big retailers.
Wal-Mart (WMT), the nation's largest retailer, said Monday that same-store sales growth last week exceeded the company's plans for a 3% to 5% increase. Growth was driven by the first batch of tax rebate checks arriving in mailboxes across the country. Same-store sales measure activity in stores open at least a year.
The Bentonville, Ark.-based company has launched a marketing campaign tied to the tax rebate, and is offering to cash the checks in its stores free of charge. The company said the effort is paying off, with 25% to 30% of the checks cashed being spent in the stores. Electronics and hard goods such as air conditioners were flying off shelves, the company said.
For the month, the company expects sales to be in the upper range of its 3% to 5% growth goal. Also Monday, the company said it is comfortable with the current Thomson Financial/First Call consensus earnings estimate of 37 cents a share for the second quarter that ends July 31. The company is scheduled to report results on Aug. 14.Shares lately traded at $55, down 41 cents. Meanwhile, at J.C. Penney (JCP), based in Plano, Texas, July same-store sales were above plans that called for a slight increase. Department stores were on track for a low-single-digit percentage increase, while drugstore sales were tracking in the upper end of plans for high-single-digit precentage growth. Sales at its catalog division are set for a double-digit decline. Shares were up 67 cents at $27.81. Sales were also robust at Troy, Mich.-based Kmart (KM), the other large retailer that typically releases sales figures on a weekly basis. In a prerecorded call, the company said sales were "well above" plans for up to 2% gain in the third week of July. Its shares were unchanged at $11.22. Most of the nation's retailers are scheduled to report July same-store sales Aug. 9, although a few reports will begin to trickle in before that. The figures are closely watched by analysts and investors, and stocks often move on the news. July's numbers will be particularly scrutinized for signs of the direction of the consumer economy, which has held up relatively well this year in the face of a faltering manufacturing sector.
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