May 16, 2010

Sales pick up, but retailers cautiousBy Maria HalkiasDallasNews.com

Texas – Department store profit and sales increases reported this week prove consumers are back in the malls.

But given the extreme beating this group took during the recession, managements are shy about predicting good times ahead.

“We think that the consumer is no longer in hiding, but they’re being very pragmatic in terms of the way they shop,” said Myron “Mike” Ullman, chairman and chief executive of J.C. Penney Co.

Plano-based Penney said Friday that it more than doubled its first-quarter profit, but it offered a conservative outlook. Also on Friday, Dillard’s Inc. reported a more than sixfold increase in profit as it cut expenses, lowered inventory and increased sales.

Earlier in the week, Fossil Inc., the watch and accessories maker, said its first-quarter profit more than doubled as its U.S. department store customers replenished inventories. Kohl’s Corp. and Macy’s Inc. beat forecasts. Nordstrom Inc.’s first quarter was 43 percent above a year ago, but it missed forecasts.

They’re all fighting to gain market share, and investors remain skittish.

Most retail stocks fell on Friday with the exception of Dillard’s, which gained $2.04, or 8 percent, to close at $27.76 a share. The S&P Retail Index had been on a steady rise this year, but in recent weeks it has fallen about 9 percent from its April peak.

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