Centex warns of impending $1 billion in charges
National home builder Centex has warned of an impending second-quarter charge of $1 billion, primarily in land value writedowns, following a three-month period of falling home sales combined with lower land values.
Of the approximately $1 billion, Centex paid $850 million to cover declining values of real estate and undeveloped land. The company will release official second-quarter results on Oct. 23.
Centex said home sales fell 13 percent in the second quarter, while it has set aside a provision of $60 million for higher expected losses in the mortgage and credit markets. A provision is an amount of money set aside as an allowance for bad loans, taking into consideration defaults and term renegotiations.
Net home sales dropped to 5,953 units, down 14 percent from a year ago. The company’s backlog of new homes decreased 38 percent to 9,633 units.
Based in Dallas, Centex builds homes in 25 states.
Flooring America launches shop-at-home service
Flooring America and Flooring Canada, two of the carpet and flooring retail divisions of CCA Global Partners, has launched a new “Shop at Home” service, with the aim of better meeting what the company called “booming demand” from customers.
Customers will be able to view samples at home from a Flooring America representative. Each Shop at Home service will be backed by a local store – the company currently has about 580 member-owned retail locations in the United States and Canada.
The at-home program will feature the company’s full-range of carpet and hard flooring surfaces.
“This approach represents an important expansion of our business,” said Flooring America president Vinnie Virga. “We’re very excited to offer this new program, which will give customers a better way to shop at home.”
Retailers release September sales figures
Major retailers released sales figures for the month of September, with a particularly strong showing from membership warehouse club Costco.
• Bentonville, Ark.-based Wal-Mart reported comparable-store sales rose 1.4 percent, including a 4.4 percent gain at the company’s Sam’s Club stores. Net sales rose 9.7 percent to $34.4 billion from $31.4 billion in the same period last year.
• Comparable-store sales at Minneapolis-based Target rose 1.2 percent, while overall sales rose 6.2 percent to $5.2 billion from $4.9 billion in September 2006.
• Issaquah, Wash.-based Costco saw comparable-store sales rise a hearty 6 percent, while overall sales rose 9 percent to $6.05 billion from $5.53 billion last year.
In all, U.S. chain store sales increased by 1.7 percent on a year-over-year basis, according to the International Council of Shopping Centers (ICSC). Abnormally warm weather negatively impacted apparel sales during the period, the group said.