by Evan Clark
Posted Tuesday May 17, 2011
From WWD.COM
Luxury continued to reign in first-quarter results, with Saks Inc. posting a 51 percent gain in profits and outpacing both Wal-Mart Stores Inc. and The TJX Cos. Inc.
“With the rebound in the financial markets, the luxury sector has rebounded as well," said Stephen Sadove, chairman and chief executive officer of Saks. "We are increasingly optimistic about the future and are pleased that our customers have responded to our differentiated merchandising, service, and marketing initiatives."
Lower-income consumers, on the other hand, are being pressured by continued high unemployment, weakness in the housing market and elevated food and gasoline prices. Wal-Mart has also suffered from changing merchandising plans, but said its plan to return to its low-price roots is gaining traction.
Saks' net income rose 51 percent to $28.4 million, or 16 cents a diluted share, from $18.8 million, or 11 cents, a year earlier. Adjusted earnings beat analyst estimates by 1 cent.
Sales increased 8.8 percent to $726 million from $667.4 million on a 10.2 percent rise in comparable-store sales.
Saks expects comparable-store sales to rise in the high-single-digit range in the second quarter.
Profits attributable to Wal-Mart rose 3 percent to $3.4 billion, or 97 cents a diluted share, from $3.3 billion share, or 88 cents, a year earlier. Adjusted earnings of 98 cents were 3 cents better than expected by Wall Street.
Revenues for the quarter increased 4.4 percent to $104.19 billion from $99.81 billion with a 1.1 percent comp decline in the U.S. discount division.
“We recognize we still have work to do and comp sales growth remains the greatest priority for me and the entire Wal-Mart U.S. team," said Mike Duke, president and chief executive officer of Wal-Mart. "The good news is that the plan [divisional ceo] Bill Simon and his team are executing is gaining traction. We’re focused on delivering every day low price and a wide assortment.”
At off-pricer TJX, net income fell 19.8 percent to $266 million, or 67 cents a diluted share, from $331.4 million, or 80 cents, a year earlier. Adjusted earnings of 78 cents fell 2 cents shy of analyst expectations.
Sales rose 4.1 percent to $5.22 billion from $5.02 billion.
The fiscal first quarter ended on April 30 for all three companies.
