September Was Good to Retailers - TheStreet

Updated from 9:46 a.m. EDT

September sales at the nation's retailers look much improved over last year, with

BJ's Wholesale

(BJ) - Get Report

one of the big winners among discounters.

BJ's posted a 12.4% jump in comparable-club sales, well ahead of its own guidance for a 6% to 8% increase. Total sales skyrocketed 20.2% to $606.4 million. Shares of BJ's were rising $1.44, or 6.7%, to $22.95 in early trading.

Based on the stronger-than-expected sales in the first two months of its current quarter and expectations for comparable-store sales to rise 8% to 10% in October, BJ's boosted its EPS guidance to a range of 24 cents to 28 cents from a previous estimate of 19 cents to 23 cents. For the full year, the company raised its guidance to a profit of $1.34 to $1.42 a share, up from old guidance of $1.29 to $1.37 a share.

Wal-Mart

(WMT) - Get Report

reported that same-store sales increased 5.6%, slightly beating its own expectations, with Sam's Club same-store sales up 8.2%. Wal-Mart said it sees overall comp-store sales rising 3% to 5% in the October period.

Total sales in September rose 13% to $23.4 billion, with its Wal-Mart division up 12.7% to $15.9 billion. Sam's Club total revenue increased 11.8% to $3.2 billion. Wal-Mart shares were up 76 cents, or 1.3%, at $59.28.

Wal-Mart's main rival,

Target

(TGT) - Get Report

, had a 5.4% increase in same-store sales and a 12.3% jump in total sales to $3.94 billion. The company cited above-plan sales at its Target and Marshall Fields stores. Shares were rising 80 cents, or 2%, at $40.10.

September sales were well above many retailers' expectations thanks to "powerful surges in liquidity -- much of it credit and stimulus driven -- making this back-to-school season a big success," said Richard Hastings, chief retail analyst at Bernard Sands, a retail credit rating company. Hastings believes September's sales momentum should hold through the end of the year.

At

Family Dollar Stores

( FD), same-store sales rose 5.3%, in line with its expectations. Total sales increased 15.2% to $463.6 million. The stock was rising 94 cents, or 2.3%, at $42.32.

The company said sales in existing stores in the October period and in the first quarter ending Nov. 29 should rise 4% to 6%.

At

Sears

(S) - Get Report

, comparable domestic-store sales rose 3.2%, with total sales up 3.5% to $2.5 billion. The company said women's ready-to-wear and men's apparel were strong categories. The stock was up 57 cents, or 1.2%, at $49.30.

J.C. Penney

(JCP) - Get Report

had a 0.7% increase in September comparable department-store sales, helped by back-to-school shoppers but hurt by soft overall sales in the final week of the period. Eckerd drugstore sales rose 1.3% with comparable-drugstore sales up 1.1%.

In October, the company said it expects flat comp-store sales, compared with an increase of 13.7% last year. Shares of J.C. Penney were up 36 cents, or 1.6%, at $22.33.

Federated Department Stores

(FD)

said same-store sales rose 3.2%, ahead of its goal of flat to down 1% sales. Total sales increased 3% to $1.35 billion.

Federated's October same-store sales are seen as being flat to slightly up. The October expectation, combined with stronger-than-expected sales in August and September, led Federated to up its third-quarter EPS estimate to 30 cents to 33 cents from a previous guidance of 25 cents to 30 cents. The company also reaffirmed its fourth-quarter outlook, and shares were adding $1.15, or 2.6%, at $45.55.

And same-store sales at

Nordstrom

(JWN) - Get Report

rose 7.7% on total sales of $563.7 million, which is an 11.4% increase over last year. The stock was up $1.45, or 5.4%, at $28.48.

At the

Gap

(GPS) - Get Report

, same-store sales jumped 13%, while the retailer had a 14% increase in total sales to $1.5 billion. Gap said each of its brands had double-digit positive sales comps and positive store traffic comps. Shares were up 71 cents, or 3.9%, at $18.90 recently.

"The strength of apparel and accessories sales in September goes beyond cooler temperatures," Hastings said. "Better product at better prices, a combination of new and retro styles, and terrific values on basics sold at Gap, Target, Wal-Mart, and Costco, among others, are working to boost softlines sales."

Meanwhile, teen retailer

Abercrombie & Fitch

(ANF) - Get Report

had a 1% drop in same-store sales, but the company posted a 16% jump in total sales to $149.6 million. Shares were up $1.20, or 3.9%, at $32.10.

Rival

American Eagle's

( AEOS) same-store sales dropped 2.8% on a 7.9% increase in total sales to $122.1 million. The stock was rising $1.73, or 10.3%, at $18.55.

Chico's FAS

(CHS) - Get Report

and

Pacific Sunwear

(PSUN)

both blew away other specialty retailers with their high double-digit same-store sales results. Chico's reported a 22.2% increase in same-store sales amid a 58% increase in total sales to $86 million. Shares were up $2.28, or 7%, at $34.84.

PacSun had a 18.5% increase in same-store sales and a 29% jump in total sales to $81.9 million. The company said young men's, juniors, footwear and accessories were strong categories. As a result, the company raised its third-quarter earnings outlook to 29 cents a share, from 27 cents a share. The company expects October same-store sales to rise about 5%, and shares added $1.06, or 4.7%, to $23.80 recently.

Ann Taylor's

(ANN)

same-store sales rose 6.9% amid a 17.2% jump in total sales to $160.5 million. Shares were up $1, or 2.9%, at $35.

Meanwhile, its rival

Talbots

(TLB)

had a 0.6% increase in September same-store sales and total sales were up 3% to $182.5 million. The company said it started a midseason sale one week later than last year, which lowered comparable-store sales by about three percentage points.

However, the company now sees earnings of 62 cents to 65 cents a share in the third quarter, compared with 63 cents a share last year, and below the analyst consensus of 67 cents a share. And shares were down $1, or 2.8%, at $34.94.

The third-quarter's overall unexpected jump in sales has led retail trade association, National Retail Federation, or NRF, to up its estimated sales growth forecast for the quarter to 5.8% from 5.7%. The NRF cited a solid back-to-school season, pent-up demand for apparel, more seasonable weather, and strong demand for home merchandise.

"The long-awaited bounce in economic activity has finally arrived," said NRF Chief Economist Rosalind Wells. "While we had forecast a pick-up in the second half of the year, this kind of strength was not anticipated."

As a result, the NRF is now forecasting a 4.1% increase in sales growth for 2003, up from its July expectation of a rise of 3.5%. The NRF continues to expect a 5.7% increase in holiday spending from last year to $217.4 billion.

Still, the labor market is a concern, the NRF said. For the retail sector to keep growing, job losses have to turn into job gains. This will then elevate gains in wages and salaries and consumer spending should increase.

"Geopolitical concerns represent the biggest wild card in the outlook," Wells said. "It is impossible to factor into our forecasts consumers' reactions to events that are as yet unknown."