Wal-Mart reported a profit decline of 5% as bad weather, poor sales abroad and cuts to food stamps sent net income down to $3.6 billion from $3.78 billion a year ago. Earnings per share fell 3.5% to $1.10, missing analyst estimates.
"Like other retailers in the United States, the unseasonably cold and disruptive weather negatively impacted U.S. sales and drove operating expenses higher than expected," said Wal-Mart CEO Doug McMillon in a statement.
Meanwhile, J.C. Penney appears to be making a comeback a little more than a year after former CEO Ron Johnson left after an unsuccessful turnaround attempt. The retailer beat analysts' expectations with an earnings per share loss of $1.15 — analysts expected a loss of $1.26 a share — and sales up 6.3% to $2.8 billion, from $2.6 billion a year ago.
Penney shares leaped nearly 20% in after-hours trading to $10.03. The company also announced that it took out a $2.35 billion line of credit to increase liquidity during peak times such as the back-to-school and holiday shopping seasons.
"It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold," CEO Mike Ullman said in a company statement. "We expect to carry this momentum into the second quarter as we continue to position the company for long-term profitable growth."
Department stores Nordstrom and Dillard's both reported successful first quarters, with positive sales so far in 2014, the companies said Thursday.
Nordstrom's net sales grew 6.8% to $2.8 billion, compared with $2.65 billion last year. Earnings fell to $140 million from $145 million, which the company attributed to planned investments in technology. Earnings per share were 72 cents, beating the company's own estimates of from 60 to 70 cents.
Same-store sales, or sales a! t stores open at least a year, grew 3.3%, up from last year's 3.1% growth, thanks to strong performance in accessories, cosmetics and women's shoes.
Dillard's reported a gain of $2.56 per share, vs. $2.50 last year. Net income was $111.7 million, vs. $117.2 million last year. The 2013 first quarter included a net after-tax credit of $4.4 million. Total sales increased 1% to about $1.54 billion from $1.53 billion.
CEO William Dillard said in a statement that the 2% increase in same-store sales marked the 15th-consecutive quarter of positive sales.
While Wal-Mart saw same-store sales fall 1.4%, sales at the company's Neighborhood Markets, smaller stores that compete with drugstores and grocery stores, continue to climb. Sales at the Markets rose 5%, and Wal-Mart reaffirmed plans to open more. In September, Wal-Mart said it would have about 500 Neighborhood Markets by the spring of 2015, up from 290 at the time.
Penney continues to promote heavy sales, especially around holidays such as Valentine's Day and Easter, in an attempt to regain customer traffic. Ullman said that April marked the first time in more than 30 months that Penney's experienced positive store traffic.
Brian Sozzi, CEO of Belus Capital Advisors, says Penney's merchandise assortment has improved and is better displayed in stores.
"J.C. Penney stores looked visually appealing in the first quarter," he says. "Clothing was folded. Merchandise was properly ticketed."
He adds, "I think the consumer saw the old school J.C. Penney back in action, with promotions consistently in the range of 30% to 45%. "(Ullman) is taking J.C. Penney back to what he knows: heavily promoted and well merchandized."
Contributing: Roger Yu
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