--Retailers did well in January
--Macy's, Kohl's standouts
--Number of retail reporters dwindling
By Karen Talley
U.S. retailers turned in strong sales for January, a time of
heavy promotions to clear holiday goods and make way for early
spring merchandise.
January is the end of the fiscal year for most retailers and the
month is important because it serves as a good barometer of how
much consumers have left over after holiday spending and also gives
inklings of what type of buying may lie ahead.
January sales were helped by a number of measures including the
averted "fiscal cliff," growth in jobs and greater wealth from home
prices and the rising stock market. The sales figures follow a
generally lackluster December, when economic unknowns left many
consumers reluctant to spend. "People held on to some of their
money last month, and when the economic Armageddon didn't transpire
they felt a bit more free to indulge," said David Bassuk, head of
the global retail practice at AlixPartners.
Consumers were also drawn into stores by discounts, which eat
into gross margins. "They have come to expect them and promotions
are a key reason consumers shop in January," said Nancy Liu, retail
strategist at Kurt Salmon.
Target Corp. (TGT) posted a 3.1% rise in January same-store
sales compared with a year ago, when 1.7% was expected by analysts.
"January comparable-store sales were in line with our expectations
as [customers] responded to clearance prices on holiday inventory,"
said Gregg Steinhafel, Target chief executive. At the same time,
customers "continue to shop with discipline in the face of a slow
economic recovery and new pressures, including recent payroll tax
increases," Mr. Steinhafel said.
Macy's Inc. (M) had a double-digit month, with same-store sales
rising 11.7%, when 6.4% was expected. January "was an outstanding
month for Macy's and Bloomingdale's," said Chief Executive Terry
Lundgren. "Our sales were driven by our strategy to flow-in more
fresh fashion goods in December to better serve post-holiday
shoppers seeking new and interesting merchandise. Our strategies
are resonating with customers as they shop in our stores, online
and via mobile." Macy's, after lowering fourth-quarter guidance
when it reported December same-store sales, upped its projection
back to the $1.94 a share to $1.99 it originally estimated.
Kohl's Corp. (KSS) reported a 13.3% rise in same-store sales,
when 3.1% was expected, as the retailer moved out inventory. Kohl's
did not update its fourth-quarter earnings projection, so it is not
clear yet what damage the retailer's price-cutting did to its gross
margin or bottom line, the latter forecast the company slashed last
month.
The 18 retailers tracked by Thomson Reuters posted 5.8% growth
in January same-store sales, or sales at stores open over a year.
They were expected to post 3.5% growth. The figure compares with
4.4% a year ago. The 18 will fall to 14 with the new year as Target
Corp., Kohl's Corp., Stage Stores Inc. (SSI) and Bon-Ton Stores
Inc. (BONT) stop reporting same-store sales on a monthly basis.
Gap Inc. (GPS) reported same-store sales rose 8%, double the 4%
growth that was expected, buoyed by a 12% rise in comparable store
sales at North American Old Navy stores. Gap stores in North
America, meanwhile, posted 8% growth in comparable store sales,
while sales rose 8% at Banana Republic, and international rose
1%.
The company said it expects fourth-quarter earnings to be in the
range of 70 cents to 71 cents per share. Analysts polled by Thomson
Reuters were recently looking for per-share earnings of 69
cents.
Nordstrom Inc.'s (JWN) same-store sales rose 11.4%, when 6% was
projected. A healthy stock market aided the net worth of the
store's upscale shoppers.
Costco Wholesale Corp. (COST) reported a 4% rise in U.S.
same-store sales minus gasoline, compared with the 3.6% increase
that was expected. On a regional basis, Costco saw strength in
Texas, the Southeast, the Midwest and the Northwest.
By category, both hardlines and softlines comparable sales
increased in the mid-single digit range, with hardline strength
posted in hardware and consumer electronics, and softline strength
reported in small appliances and women's apparel.
Including the impacts of foreign exchange and gasoline prices,
the average transaction was 1% higher.
Limited Brands Inc. (LTD), operator of Victoria's Secret and La
Senza, reported comparable-store-sales growth of 9%, when analysts
were expecting 3.7%. The company said it was "comfortable" with the
Wall Street consensus estimate of $1.73 for fourth-quarter adjusted
earnings per share.
Off-price retailer TJX Cos. (TJX) reported January same-store
sales rose 3%, when 3.5% was expected and lifted its fourth-quarter
and full-year guidance.
Stage Stores Inc. said January same-store sales rose 10.5%, when
4.6% was expected, with growth in every merchandise category and
geographic area. Accessories, home, intimates, junior sportswear
and misses sportswear were particularly strong. "January put an
exclamation point on a fantastic fourth quarter and year, as the
month's strong performance helped push comparable store sales for
both periods to their highest levels in over 10 years," Chief
Executive Michael Glazer said.
Zumiez Inc. (ZUMZ) posted 2.6% growth in same-store sales when a
3.1% decline was expected. Based primarily on better than expected
sales, the company increased its fourth quarter guidance. Zumiez
now expects earnings per share to be 65 cents to 66 cents, from a
prior estimate of 59 cents to 62 cents.
Fellow teen retailer Buckle Inc. (BKE) was an outlier, reporting
a 2% drop in same-store sales when a 1.3% rise was projected.
Teen retailer Wet Seal Inc. (WTSLA) also had a tough time, with
January comparable-store-sales dropping 9.4%, when a 2.3% decline
was projected.
Bon-Ton Stores Inc. said same-store sales decreased 0.4%, when a
1% gain was expected.
--Anna Prior contributed to this article
Write to Karen Talley at karen.talley@dowjones.com
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