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Several top retailers show signs of rebound

Clockwise from top left, Target, Home Depot, TJX Cos., which runs TJ Maxx, and Saks gave investors reason for optimism Tuesday by topping analysts’ expectations. Saks and Target both posted profits after several consecutive losing quarters.

Associated Press

Clockwise from top left, Target, Home Depot, TJX Cos., which runs TJ Maxx, and Saks gave investors reason for optimism Tuesday by topping analysts’ expectations. Saks and Target both posted profits after several consecutive losing quarters.

Some of the nation's largest retailers, discount and luxury chains alike, posted better-than-expected earnings Tuesday and said they were seeing signs of broader economic stabilization.

Home Depot, the world's largest home-improvement retailer, said its profit declined 8.9 percent, but executives said business had improved in areas hardest hit by the housing crisis, including Arizona, California and Florida.

For the three months ended Nov. 1, Home Depot earned $689 million, or 41 cents a share, compared to $756 million, or 45 cents a share, last year.

Revenue fell 8 percent, to $16.36 billion.

"There is still a great deal of pressure in the housing and home-improvement markets," said Frank Blake, Home Depot's chairman and chief executive.

Indeed, the chain's weakest categories were goods typically used by professional builders — plywood, lumber, concrete, gypsum, electrical and millwork.

The most robust categories continued to be tied to do-it-yourself repair and small remodeling projects — paint, plumbing, flooring, garden, building materials, and kitchen and bath.

Also Tuesday, Target posted a profit after eight quarters of declines.

For the three months ended Oct. 31, Target earned $436 million, or 58 cents a share, compared with $369 million, or 49 cents a share, in the period a year ago. Revenue rose 1.1 percent to $15.3 billion, but same-store sales declined 1.6 percent.

Luxury department store Saks also broke free from the trend of earnings declines, posting a modest profit, mainly because it controlled expenses.

Stephen I. Sadove, chairman and chief executive of Saks, said in a conference call that the environment "appears a bit more stable and predictable" and that in the long run, he was "confident luxury will rebound."

In recent months, Saks has cut its inventory to be in line with lower demand, and the chain introduced more affordably priced and exclusive merchandise to appeal to the new frugal-minded consumer.

For the three months ended Oct. 31, Saks made a profit of $1.9 million, or a penny a share, in contrast to a loss of $43.7 million, 32 cents a share, last year.

More good news Tuesday came from TJX Cos., which owns chains including TJ Maxx and Marshall's. The chain posted record sales and earnings for the three months that ended Oct. 31.

For the third quarter, the company had a profit of $348 million, or 81 cents a share, up 40 percent from last year. Revenue rose 10 percent to $5.24 billion.

Several top retailers show signs of rebound 11/17/09 [Last modified: Tuesday, November 17, 2009 10:28pm]
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