New York City -- Warehouse club operators Costco and BJ’s Wholesale Club continue to benefit from high fuel prices and bargain-seeking consumers, with both chain reporting solid results.
Costco reported a 10% rise in same-store sales In July, beating Wall Street's expectations for an 8.6% increase.
The company’s strongest performance was overseas, with international same-stores sales jumping 22%. Its U.S. sales increased 6%. Removing gas price inflation and stronger foreign currencies, same-store sales gained 5% for the month.
Costco said that total revenue for the four weeks ended July 31 rose 15% to $6.74 billion. The warehouse club operator said that there was one less shopping day in the United States during the current period, which hurt its same-store sales and its total revenue by about 3%, or about 3.5% in the United States.
BJ's Wholesale Club, which is in the midst of being acquired by private equity firms Leonard Green & Partners and CVC Capital Partners in a $2.8 billion deal, said that its July same-store sales rose 9.2%, topping Wall Street's average prediction of a 6.6% increase. Excluding gas sales, BJ’s same-store sales gained 5.4%.
The wholesale club operator said second-quarter same-store sales rose 7.8% (and 3.8% when excluding gas sales). Total revenue increased 11% to $2.98 billion.
Target reported a 4.1% rise in same-store sales in July. Analysts had forecast a smaller 3.7% increase. The discounter said total revenue for the four weeks ended July 30 rose 6% to $4.84 billion.
“Back-to-school sales are off to a solid start, contributing to our confidence in the strategies we have in place and our ability to execute them, especially as we head into the 2011 holiday season." and CEO Gregg Steinhafel in a statement.
Commodity categories had the strongest growth, with grocery category same-store sales in the mid to upper teens, while health care, beauty and household essentials increased in the mid-to-upper single-digit range.
Strength in apparel continued in July. Within apparel, the company said sales were strongest in intimate, hosiery and performance categories along with women’s and men’s apparel. The softest results were seen in jewelry and accessories.
TJX Cos. said its same-stores sales in July rose 4%. Sales for the four-week period ended July 30, 2011 were $1.6 billion, up 8% from $1.5 billion in the prior-year period. The company raised its outlook for the second quarter
In a statement, CEO Carol Meyrowitz called out the 5% same-store sales gain in the company's Marmaxx Group, its largest division, which includes the T.J. Maxx and Marshalls retail chains.
In other discount same-store sales results:
- At Fred's, same-store sales dipped 0.5%, falling short of expectations. The company also lowered its second-quarter earnings outlook again.
- Duckwall-Alco Stores said its sales increased 7.6%, excluding fuel. The retailer said sales growth was balanced across many categories.