Several of the nation's largest retailers reported big profit gains Tuesday for their first quarters, compared to a year ago, largely because of stronger-than-expected sales on leaner inventories.
Dayton Hudson, ranked fourth, said its profit jumped 15.2%, while No. 6 Federated Department Stores posted a 9.1% gain. Eighth-largest May Department Stores said its profit soared 21%, and the smaller Allied Stores said its profit surged 20.1%.
On the downside, Associated Dry Goods said its profit fell 41.9%.
The retailers, except for Associated Dry Goods, "went into this period with lean inventories and very conservative game plans and were able to generate some upside surprises," said Jeffrey Edelman, a retail analyst with Dean Witter Reynolds. "When sales exceed expectations, your markdowns are a little less and better controlled."
Dayton Hudson, based in Minneapolis, said net earnings for the three months ended May 3 totaled $38.6 million, compared to $33.5 million in the same period a year earlier. Total revenue for the quarter increased 10%.