(Updates with results from apparel retailers and department
stores, starting in the sixth paragraph.)
DOW JONES NEWSWIRES
Retailers generally reported December same-store sales above
Wall Street's modest growth expectations, leading numerous
companies to boost forecasts.
Analysts were expecting increases to some retailers' fiscal
fourth-quarter targets. Promotions during this holiday season were
more surgical and inventory planning more rational than the
panicked discount pricing that set in last year. As a result,
margins and profitability have been expected to benefit even if
traffic and purchases could have been more robust.
Those boosting views ranged the gamut from Limited Brands Inc.
(LTD) to Macy's Inc. (M) to American Eagle Outfitters Inc.
(AEO).
Unusually cold weather and big snowstorms along the East Coast
were a curveball, but stores seemed to compensate for any lost
traffic from weather with online sales and strong business in the
post-Christmas week. Macy's online sales were up 29%, for
example.
Retailers sales comparisons started to ease in September and
increased the likelihood of year-over-year gains, after stores
suffered for more than a year as consumers cut spending. This
December's results follow last year's 3.6% drop, excluding Wal-Mart
Stores Inc. (WMT), according to Thomson Reuters. Wal-Mart stopped
issuing monthly sales figures in May.
Other discounters reported solid results for December. BJ's
Wholesale Club Inc. (BJ) posted a 2.7% increase excluding gasoline
sales, and the company said the growth would have been double that
absent the mid-December snowstorm that socked the East. Larger
rival Costco Wholesale Corp. (COST) had a 2% rise in the U.S. minus
gasoline. Unadjusted global same-store sales rose 9%, topping
expectations. Target Corp. (TGT) surprised the Street with
comparable-sales growth last month after two months of year-on-year
declines and said its fourth-quarter profit would beat
expectations, too.
Teen and child retailers were generally performing well. Again
recording weakness was Abercrombie & Fitch Co. (ANF). Analysts
had worries that the company's eagerness to discount this
year--after keeping up an institutional bias to avoid promotions
well into the recession--would hurt the retailer. Its same store
sales dropped a worse-than-seen 19%, on top of a 24% drop the
previous year.
But on the other hand Buckle Inc.'s (BKE) 6.6% increase beat
expectations in spite of a difficult comparison to the prior-year
period, when it had double-digit sales growth. The company has been
posting revenue and comparable sales increase throughout the
recession. Aeropostale Inc. (ARO), another strong performer in the
space, boosted its quarterly profit view at
Among more generalized apparel sellers, those with a focus on
value performed best. TJX Cos. (TJX), which buys items below
wholesale price and sells them at steep discounts at its T.J. Maxx
and Marshalls stores, posted a 14% same-store sales jump, more than
double analysts' expectations. It raised earnings guidance. Gap
Inc.'s (GPS) and Limited Brands Inc.'s (LTD) sales didn't quite
achieve analysts targets, but results were good enough for Limited
to boost its quarterly earnings guidance.
Department stores beat views across the board, with Saks Inc.
(SKS) and Nordstrom Inc. (JWN) particularly standing out in spite
of their reputation for higher-priced goods. The posted 9.9% and
7.4% sales increases, respectively. Sales expectations for the
group were mixed but leaned to the downside.
Elsewhere, Sears Holdings Corp. (SHLD) set its fiscal
fourth-quarter earnings estimate well above analysts' expectations,
as it reported same-store sales growth last month thanks to
strength at Kmart. Sears rallied 13% premarket to $100.70.
Other retailers whose stock were climbing premarket included
Zumiez Inc. (ZUMZ) and Ulta Salon Cosmetics & Fragrance Inc.
(ULTA), who also boosted expectations for the quarter.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com