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Carter Hawley Chief Sees Good 2nd Half

September 13, 1985|NANCY YOSHIHARA | Times Staff Writer

Bucking the retail industry's nervousness about fall sales, the head of Carter Hawley Hale Stores said Thursday that the Los Angeles-based company expects double-digit increases in sales in the second half.

Philip M. Hawley, chairman and chief executive of the Los Angeles-based retailer, told a meeting of securities analysts that Carter Hawley expects to easily beat the projected 6% to 8% rise in retail sales industrywide.

The company's performance in the second half will be watched closely by industry analysts as a measure of Carter Hawley's long-term restructuring.

The restructuring appeared to be producing improved results last year, but the company's profitability was hurt by its defense against an unwanted takeover.

Other retailers and analysts have been less optimistic about fall sales, noting that consumers are burdened with record high debt and that spending, particularly during the crucial Christmas selling period, could suffer.

Hawley acknowledged that the 18% consumer debt level but said that the large number of two-income households today are better able to carry the debt load and that consumer balance sheets are in "excellent shape."

He declined to make specific projections on the company's earnings, but he did say that Carter Hawley, parent of the Broadway, Neiman-Marcus and Bergdorf Goodman, expects "very sizable increases" in second-half earnings from continuing operations before taxes.

In the first half, Carter Hawley posted a gain, compared to a loss in the year-before period, which included a number of one-time charges relating to a new markdown policy and to its costs in fending off a takeover attempt by the Limited of Columbus, Ohio.

If those items were excluded, Hawley said, profits from continuing operations before taxes would have risen 80% in the first half from a year ago.

"We look for increases larger than that in the fall season," which runs from September through January, he said.

The company's return on equity will run more than 12% in 1985 and rise to 15% in 1986 and 17% to 18% the year after, Hawley predicted.

In response to a question, Hawley ruled out any acquisitions by Carter Hawley for the next three to four years, "unless an outstanding value should occur in the specialty area." He did not elaborate.

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