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COLD SPRING CHILLS WAL-MART FORECAST

BENTONVILLE, Ark. -- Wal-Mart Stores here said last week it is revising its first-quarter forecast downward as a result of the cold, wet spring weather across the country that has kept customers from buying seasonal items.The company said it is revising its earnings per share estimate for the first quarter downward from 32 cents to something about 30 cents per share."Because of the cooler weather

BENTONVILLE, Ark. -- Wal-Mart Stores here said last week it is revising its first-quarter forecast downward as a result of the cold, wet spring weather across the country that has kept customers from buying seasonal items.

The company said it is revising its earnings per share estimate for the first quarter downward from 32 cents to something about 30 cents per share.

"Because of the cooler weather patterns we have seen over the last several weeks, we now believe earnings may come in below our original estimate of 32 cents but will be up slightly from the prior year's first quarter of 30 cents per share," the company said.

The revised forecast came as Wal-Mart released March sales results. Comparable-store sales were up 3.3% for the five-week period in the Wal-Mart division, which includes supercenters. Total company comp sales were up 3.5%.

Wal-Mart said it estimates total company comp sales will come in between 3% and 5% for April and for the first quarter. The company added that first quarter results are scheduled to be released May 15.

Food sales -- along with health and beauty aids, among other products -- remained strong during March, the company said.

However, Wal-Mart added, sales for "spring categories, such as lawn and garden, sporting goods and several apparel areas were impacted by these cool weather patterns and therefore came in below plan for the period as a whole."

The company noted that it "saw improved overall comps as well as increased sales on spring merchandise" in regions where the weather was warmer, such as the West.

Total company sales rose 11.3% to $18.8 billion in March, while Wal-Mart division sales were up 11.5% to $11.9 billion. At Sam's Clubs, sales increased 6.4% to $2.6 billion.

In the Wal-Mart division, pet supplies, health and beauty aids and pharmacy sales were all above the division average.

At Sam's Clubs, good and pharmacy were among the strongest categories.

Commenting on the Wal-Mart earnings revision, Gary Giblen, senior vice president and director of research, C L King Associates, New York, told SN, "Spring hasn't arrived yet. That has to impact anyone selling apparel."

Deborah Weinswig, food and drug chains analyst, Bear Stearns, New York, said spring may not arrive at all this year for retailers. "I believe that consumers' delayed seasonal purchases will virtually eliminate the spring selling season, and sales of seasonal merchandise will now transition directly from winter to summer. Last year, we saw a similar transition from spring directly to fall."

Weinswig noted the slump was hitting new stores particularly hard. "We are seeing a slower ramp-up of new store productivity given the dearth of seasonal sales," she said.

Weinswig also noted that in 1999 Easter fell in March, which helped April comps in 2000 when the holiday shifted to April.

She added that she does not expect the company to be able to make up for the sluggish start before the end of the year. She said she was revising her full year earnings estimate down from $1.61 to $1.51 per share.

This revision, she said, reflects "continued softness in consumer spending and a greater proportion of low-margin food sales." However, she did expect those food sales "to post low-double digit comp growth" in 2001.

TAGS: Walmart