The vast majority of retailers reporting November same-store
sales have missed analysts' muted expectations after last year's
plunge, and the industry as a whole may even post results below
prior-year levels.
The performance comes after what many viewed as a mixed kickoff
to the holiday shopping season, with shoppers on average spending
7.9% less than the Black Friday weekend of 2008, according to the
National Retail Federation. In general, lower-priced items were
favored.
That continues a trend of less-expensive retailers, be they
discounters or lower-priced apparel sellers, outperformaning other
chains the past year. But Costco Wholesale Corp. (COST) saw
weakness in November after two months of solid growth, as
same-store sales were flat in the U.S. excluding gasoline for the
warehouse club. Its shares fell 2.5% premarket.
Smaller rival BJ's Wholesale Club Inc. (BJ), which has been
outperforming Costco of late, also reported weaker-than-expected
results with its 1% growth. Its stock dropped 1.6%.
This November's results follow last year's 7.8% slump, excluding
Wal-Mart Stores Inc. (WMT), according to Thomson Reuters, as the
stock market swooned. Wal-Mart stopped issuing monthly sales
figures earlier this year.
A modest 2.1% increase was expected for this November, but more
declines were seen for the teen/child and department-store
segments. But results are tracking around break-even, said Thomson
Reuters.
"It's still early, but it looks as if the litany of Black Friday
and Cyber Monday surveys did not exactly paint a clear picture of
start to the holiday selling season," said Wall Street Strategies
analysts Brian Sozzi. He added that temperatures were generally
warmer than normal, pressuring cold-weather products.
But because the sales reports weren't weren't accompanied with
profit warnings, he noted the help of online sales partially
offsetting store weakness and lower costs appear to be helping.
Limited Inc. (LTD) surprised analysts for the second time in
three months by posting same-store sales growth--3% in November
after a 12% slump last year. A gain posted in September was the
first for the Victoria's Secret and Bath & Body Works parent in
two years. The company said it saw "record sales" on Black Friday,
helping Limited avoid a potential same-store-sales drop for
November. It added merchandise margins were "up significantly" in
the month.
As it did for November, Limited projected December same-store
sales falling by the low- to mid-single digits on a percentage
basis.
Pier 1 Imports Inc. (PIR), which has been posting improved
results this year after a string of loses earlier this decade, said
same-store sales for its fiscal third quarter ended Saturday jumped
14% after last year's 18% tumble. President and Chief Executive
Alex Smith said the home-furnishings company saw building strength
throughout the quarter, "culminating in a very strong Thanksgiving
weekend." Shares jumped 15% premarket.
While Gap Inc. (GPS) reported flat results, in line with
expectations, teen apparel chain Abercrombie & Fitch Co. (ANF)
posted a much bigger-than-expected 17% slide in November same-store
sales. And Children's Place Retail Stores Inc. (PLCE) reported a
13% swoon, not the average 1% gain analysts anticipated. Its stock
fell 9.8% while Abercrombie dropped 7.4%.
-By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com