Costco, Target Report Weak August CE Sales
Costco and Target on Thursday reported weak August CE sales, with Costco again singling out “soft” TV sales. But weakness in CE wasn’t enough to offset strength in other categories as both companies -- as well as rival BJ’s Wholesale Club -- reported increases in sales and comparable store sales versus August 2009. BJ’s didn’t specify how CE fared overall, but a spokeswoman told Consumer Electronics Daily that TV sales were “flat” compared to August 2009.
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Overall hardline comparable store sales for Costco were up in the “low single-digit range,” Jeff Elliott, assistant vice president, finance and investor relations, said in the company’s monthly pre-recorded results call. But that was “partially offset by” majors, where CE comparable store sales were “slightly” down from August 2009, he said. The decline was “primarily due to soft TV sales” as comparable store sales fell in the “mid single-digit” range in units and dollars compared to August 2009, he said. Computer comparable store sales “were essentially flat year-over-year,” he said. “Partially offsetting the softness in TV sales were navigation and cellphones,” he said. In Costco’s “ancillary business,” the best results were in photo and optical, he said.
Costco’s sales for the four weeks ended Sunday increased 9 percent from August 2009 to $5.9 billion. Comparable store sales increased 7 percent, with the U.S. up 6 percent and other markets up 11 percent. The best-performing regions in the U.S. were the Midwest, Texas, the Northwest and Los Angeles, while the top-performing markets outside the U.S. were Canada, Japan and South Korea, said Elliott. Costco plans to report sales for Q4 and the fiscal year ended Sunday, as well as September sales results, on Oct. 6.
Target’s hardlines comparable store sales were down in the “high single-digit range” for the four weeks ended Saturday, with the weakest categories including CE, videogames, music, movies and books, the company said in its monthly pre-recorded results call. But overall sales increased 3.4 percent from the same period last year to $4.9 billion, while comparable store sales inched up 1.8 percent. The results “were in line with expectations,” said CEO Gregg Steinhafel. Target was “pleased with our strong performance in back-to-school and back-to-college categories,” he said. Store traffic “remained healthy throughout the month,” he said. Comparable store sales were “better than average” in the upper Midwest, the Carolinas and Texas, while Target saw results that were “weaker than the rest of the chain in portions of the Northeast, Southwest, Michigan and Ohio,” it said. At month’s end, its inventory “was in very good condition,” Target said.
Unlike Target, BJ’s saw a “strong” comparable store sales increase in videogames for the four weeks ended Saturday, its spokeswoman said. Other strong categories included computer equipment, while pre-recorded video was cited as one of its weakest categories. Overall BJ’s sales increased 4.9 percent from the comparable period last year to $794.6 million. Comparable store sales increased 2.4 percent.