Retailers Report Weak Sept. Sales

By: Anne D'innocenzio, AP Business Writer (AP) Shoppers, spooked by stock market plunges, the prospect of war in Iraq, and a weak job market, retrenched even further in September, casting more doubt that the holiday season will bring much joy to retailers or to the newspapers that rely on them for advertising.

As the nation's merchants reported their sales Thursday, department stores and apparel stores again languished. But even companies like Wal-Mart Stores Inc., Target Corp., TJX Cos., and Kohl's Corp., which have been the industry's stars, also posted disappointing results.

Warm weather also hurt sales, particularly in fall sweaters and pants, but analysts emphasized that consumers are just not in the mood to shop. "Consumers are unwilling to spend, and if they do they are only buying necessities," said Walter Loeb, president of retail consulting firm Loeb Associates.

The sales results led several merchants, including Target, Talbots Inc., TJX, and Federated Department Stores Inc., to reduce their earning outlook.

"This has made it more certain that the holiday will be lousy," said Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd.

The Bank of Tokyo-Mitsubishi Ltd.'s same-store sales survey of 79 stores was up only 1.5% for September. That was the weakest performance since last September, when sales, derailed by terrorist attacks, were only up 0.9%.

The September sales figure was in line with Niemira's reduced projections that had been pared down several times over the past month and a half from an original forecast of a 6% gain.

Same-store sales are sales at stores opened at least a year. They are considered the best indicator of a retailer's health.

The September results came as the Labor Department offered a dose of optimism when it announced that new claims for jobless benefits unexpectedly dropped last week to the lowest level in nearly two months. Many analysts expected jobless claims to rise.

Still, Niemira and other analysts did not feel encouraged. "One week doesn't change the broader uncertainty that's out there," Niemira said.

In addition to all the political and economic troubles, retailers are reeling over a 10-day shutdown of 29 West Coast ports, which has left mounds of holiday merchandise backed up on docks and on ships. While the ports were reopened temporarily Wednesday night, a leading industry organization expects it will take four to six weeks to get the merchandise off the docks and onto stores' shelves, barely in time for Thanksgiving and the traditional start of the holiday shopping season.

Analysts fear stores will start to heavily discount merchandise, hurting profit margins, to get rid of merchandise that may come all at once and too late. Already, Gap Inc. and AnnTaylor Stores Corp. said Thursday that the shutdown could hurt fourth-quarter earnings.

While discounters produced disappointing results for September, they still fared better than the rest of the mall-based apparel stores, many of which saw sales decline.

Wal-Mart Stores Inc. announced Thursday that same-store sales for the company were up 3.3%, below the consensus from Thomson First Call, which expected a 3.5% increase. Total sales for the month were up 10.4%.

Kohl's, reported that same-store sales decreased 3.2%. Wall Street analysts expected a 3.2% gain. Total sales were up 8.5%.

Target said same-store sales were down 0.8%, below company forecasts, but slightly better than the 1.1% decline that Wall Street expected. Total sales were up 7.1%.

TJX said that same-store sales were down 1%, below analysts' forecast for a 1.5% gain. Total sales were up 8%.

Sears, Roebuck and Co., which on Monday warned that third-quarter results would fall short of expectations, reported that same-store domestic sales for September were down 5.9%. Total domestic sales were up 3.1%.

Other selected September sales figures for leading retailers:

* Gap Inc., same-store sales were down 2%. Total sales were up 6%.

* Federated, same-store sales were unchanged. Total sales were up 2.0 %.

* J.C. Penney Co. Inc., same-store sales at its department store business were down 3.1%. Total sales slipped 0.1%.

* May Department Stores Co., same-store sales were down 6.2%. Total sales declined 2.8%.

* Talbots, same-store sales were down 6.1%. Total sales were up 1%.