|
 |
| In a file
photo people leave the Wal-Mart super store on Thursday, June 16,
2005 in Round Rock,
Texas. |
The outlook for the retail industry was suddenly more upbeat Tuesday
after Wal-Mart Stores Inc. raised its June sales outlook after months of
tepid results.
Investors had a burst of enthusiasm for retail stocks, even as they
waited for merchants to issue their sales reports on Thursday. And
analysts also said Wal-Mart's news, released over the weekend, augurs well
for the rest of the industry.
Still, with gasoline prices well over $2 a gallon, analysts question
whether consumers' spending mood will last into the back-to-school season,
one of the most critical periods in the retail year.
"(June) was a good month but whether that can be
sustained is the question," said Michael P. Niemira, chief economist at
the International Council of Shopping Centers. "Consumers were very much
out there buying despite some of the negatives. At this point, we are not
seeing any downside
to the economy or oil prices."
Wal-Mart, the world's largest retailer, said Saturday it expects to
post a 4.5 percent increase in same-store sales, a gain it attributed to
consumers buying summer merchandise as warmer weather arrived. The
forecast was welcome news after several months of disappointing sales
gains, and surpassed Wal-Mart's original projection of a 2 percent to 4
percent gain.
A 4.5 percent in same-store sales, which reflect business at stores
open at least a year, will mark Wal-Mart's biggest gain since May 2004,
when it announced a 5.9 percent increase, according to Thomson Financial.
Last week, rival Target Corp. announced that same-store sales in June
are expected to beat its projected 4 percent to 6 percent range.
Wal-Mart rose $1.52, or 3.15 percent to $49.80 on the New York Stock
Exchange, where Target rose $1.48, or 2.71 percent to $56.04. Kohl's Corp.
rose $1.71, or 3.07 percent, to close at $57.48.
The improved outlook
from Wal-Mart "bodes well for the overall retail group," said Ken Perkins,
president of Retail Metrics LLC, a research firm in Swampscott, Mass. "That should translate to
stronger sales for discounters as well as for mid-tier department stores and apparel
retailers."
(Agencies) | 
Updated: 2005-07-06 10:34
