Even Saks, the luxury retailer that has managed to post results above industry benchmarks, says it has begun to feel the pain. The company reported a net loss of $31.7 million, compared to a net loss of $24.6 million in the same period last year. "Business became much more challenging in the second quarter," the New York-based company says in its release. "During the quarter, we experienced a softening across nearly all geographies and merchandise categories," it says, adding that there was "widespread weakness in women's apparel."
And it is cutting its sales expectations going forward. "We believe our merchandise selections are compelling, our marketing is creative, and our stores look great," it says. "However, we know we are continuing to face the headwinds of the economic and retail environment." The company now expects a "flat to low-single-digit comparable store sales decline for the second half of the year."
Sales were just as soft at the other end of the consumer spectrum, with Target Corp. posting net earnings of $634 million for the second quarter--7.6% lower than the $686 million in the same period a year ago. Sales for the Minneapolis-based chain grew 5.7% to $15 billion, but same-store sales declined 0.4%.
Other big-box stores are also having a rough time. At Staples, "challenging market conditions continued during the company's second quarter, resulting in weaker-than-anticipated results," the Framingham, Mass.-based company says, releasing its preliminary results, with comparable-store sales falling 7% in the quarter.
At Home Depot, net earnings tumbled 24.3% to $1.2 billion, while sales fell 5.4% to $21 billion. (Comparable-store sales declined 7.9%.) "We continue to see pressure on our market and the consumer, generally," the Atlanta-based company says. Still, it is standing by its earlier predictions, estimating that sales in fiscal 2008 will fall 5%, and a "flat to low-single digit comparable-store sales decline for the second half of the year."