Finance & Capital Management

So maybe the Walmart U.S. isn’t lighting things up on the same-store sales front just yet; the division did manage to grow total sales by 0.6% to $62.7 billion and increase operating profits by 0.8% to $4.65 billion. This despite the fact that division president and CEO Bill Simon noted the paycheck cycle remains pronounced, and higher year-over-year gas prices are eating into the disposable income of the company’s core shoppers who are consolidating trips.

Despite progress on several key merchandising initiatives during the first quarter, it wasn’t enough to prevent Walmart from logging a 1.1% decline in same-store sales, losing customer traffic and introducing the possibility the second quarter will bring more of the same. The company’s forecast for second quarter same-store sales envisions a range of possibilities between a 1% decline and 1% increase.

Sales at Walmart’s international division increased 11.5% to $27.9 billion, aided to a large degree by a $1.3 billion currency exchange benefit, without which the sales increase would have been a more modest 6.2%.

It’s true. Sam’s Club smoked its first quarter same-store sales guidance that called for a 1% to 3% increase by hanging a 4.2% increase on the board and managed to grow operating profits by 7% to $459 million, easily outpacing the performance of Walmart’s U.S. stores and international division.

San Francisco -- Gap reported Thursday that its first-quarter earnings plummeted 23% as costs rose faster than expected, and the chain dramatically lowered its full-year earnings forecast.

Gap is spending about 20% more to produce each item than it did a year ago -- a much faster rise than it expected, the Associated Press reported.

Gap’s net income was $233 million for the quarter ended April 30, compared with $302 million. The performance was slightly better than analysts expected, however.

New York City -- Target Corp. plans to spend more than it had forecast this year on its entry into the Canadian market as it nails down more of the best retail locations sooner than expected.

The retailer said it will be able to “clarify” within weeks the number and locations of the first 100 to 150 stores it will open in Canada.

“We expect to close on higher value lease transactions sooner than expected,” Target CFO Doug Scovanner told analysts on a conference call Wednesday.

Everett, Wash. -- Zumiez reported Thursday net income of $1.9 million in the first quarter, compared with a loss of $1.9 million in the year-ago period. The retailer said it plans to open 44 new stores in fiscal 2011, including its first stores in Canada.

The results for the first quarter of fiscal 2010 include costs of approximately $1.2 million associated with the relocation of the company's distribution center from Everett, Wash., to Corona, Calif.

Columbus, Ohio -- Limited Brands reported Wednesday that strong sales boosted its first-quarter profit to $165.2 million, up 47% over its prior-year profit of $112.5 million. The company warned that rising costs will hurt its margins this year.

The parent of Bath and Body Works, Victoria's Secret and La Senza previously reported a revenue increase of 15% to $2.22 billion. Same-store sales rose 15%.
 

New York City – Aeropostale reported Thursday that net income for the first quarter decreased 64% to $16.4 million, compared to $45.4 million last year.

Revenue rose 1% to $469.2 million, from $463.6 million. Same-store sales decreased 7%.

The company opened nine Aeropostale and seven P.S. from Aeropostale stores, and closed one Aeropostale store during the quarter.

New York City -- Borders Group on Thursday said it planned to end its relationship with Seattle's Best Coffee and begin operating its own in-store cafes. 

The move will allow Borders to reduce licensing fees as it works toward emerging from bankruptcy, a spokeswoman said on Thursday, and also to tailor its menus to customer needs.

The company said in a filing in U.S. Bankruptcy Court in Manhattan that it will seek the court's approval of the move to reject its leases with Seattle's Best.