Page Title

Monday October 1, 8:36 pm Eastern Time, By Jackie Sindrich

NEW YORK, Oct 1 (Reuters) - U.S. retailers on Monday reported mixed sales results for the last week of September, with signs that shoppers were returning to malls tempered by some reports that sales dipped from the week before.

Wal-Mart Stores Inc. said its sales for the week were ``slightly below'' plans, and Sears, Roebuck and Co. said its sales were ``somewhat below'' plans, after both had reported sales ``on plan'' the week before.

Target Corp. , the No. 4 U.S. retailer, said it expected September comparable store sales to be up in the low single digits, while JC Penney Co. Inc. said sales were significantly better than its target and Federated Department Stores Inc. said its shortfall narrowed.

Analysts said sales overall had improved since the Sept. 11 airplane attacks in the United States. ``I think generally every (retailer) we've talked to has seen some improvement in their sales,'' said Wayne Hood, an analyst for Prudential Securities.

``While they're not back to plan, they are closer to plan than what they had been. It's typical to what you've seen when there have been shocks to the system in the past,'' Hood said, naming events such as the Gulf War and the assassination of President John F. Kennedy.

The attacks, in which hijackers smashed commercial planes into the World Trade Center and the Pentagon, leaving almost 6,000 people dead or missing, hit consumer confidence hard and left shopping malls almost deserted in the days immediately afterward.

William Blair & Co. analyst Mark Miller said Wal-Mart's slippage from the previous week may reflect that the long-term effect of the attack may be sinking in for consumers.

``Following Sept. 11 activity, consumers rallied around the flag. But as repercussions have sunk in, there was a deterioration in consumer confidence, which takes us to where we are today,'' Miller said.

Separately, the University of Michigan released a consumer survey on Monday that said consumer sentiment increased 4.7 percent in the first week after the attack but then fell 16.1 points the next week.

John Lawrence, an analyst for Morgan Keegan & Co., said he expects discount retailers, including Target Corp., Kmart Corp. and Dollar General Corp., to fare better than higher end rivals in the next few months, but he warned that ongoing price wars may dig into profits.

``In the past several weeks we've been on this promotional trend,'' he said. ``As we move into Q4, will they back off or do we continue to chase sales with promotions? That is my question.''

PENNEY ABOVE PLAN

Wal-Mart, the world's biggest retailer, also said same-store sales are still within its original guidance for September of an increase of 4 to 6 percent from last year.

Its shares closed up 26 cents at $49.76 on Monday on the New York Stock Exchange. Federated Department Stores, parent of Macy's and Bloomingdale's, said its same-store sales miss ``narrowed'' during the fourth week of the month, with sales below its target by a range in the high single digits.

A week ago, it said its sales were running 20 percent below its forecast since the Sept. 11 attacks and warned it would likely lower its earnings guidance for the rest of fiscal 2001.

JC Penney said department same-store sales were tracking ``significantly'' above plan through the fifth week of September.

The company, based in Plano, Texas, said it is tracking toward a high single-digit increase in same-store sales, helped by a marketing campaign that boosted sales across all of its merchandise divisions.

The Minneapolis-based Target, which also operates Mervyn's and Marshall Fields department stores, said sales for the week ended Sept. 29 for the total company were somewhat below plan and expects sales to remain so for the month to date.

For the week, Target said comparable sales were slightly below plan at Target and Marshall Fields stores, and ``well below plan'' at Mervyn's. At Target, the top merchandise performance categories were pharmacy, entertainment, intimate apparel, shoes and groceries, the company said.

Diane Swonk, an economist for Bank One, said retailers have started to see a surge in traffic, but the impact of lost jobs and a subsequent drop in income has not had time to filter through the economy yet.

``Clearly there is some catch-up in activity, now that people are getting out again. Now it is going to depend dramatically on whether there is another incident,'' she said.

Shares of JC Penney gained $1.10, or 5 percent, to close at $23 on Monday on the NYSE. Federated closed up 47 cents, or 1.7 percent, at $28.67. The Standard & Poor's Retail index, which has come back 6 percent since Sept. 17, closed down 0.14 percent at 767.39 on Monday.