UPDATE: December Same-Store Sales Are Mixed For US Retailers
06 January 2012 - 2:07AM
Dow Jones News
The all-important holiday season has come and gone, leaving some
U.S. retailers counting their blessings and others counting the
days until the next big selling season.
Macy's Inc. (M) not only beat expectations for its sales
numbers, it posted a nice bump in online sales, raised its dividend
and increased its earnings forecast for the year. Target Corp.
(TGT), however, while turning in a 1.6% rise in sales, missed its
own and analysts' expectations and cut its year forecast.
"It was a holiday period characterized by sharp promotions and
retailers pulling out all stops by expanding hours," said John
Long, retail strategist at Kurt Salomon. "What's remarkable in the
numbers is that while there were some standouts, this didn't
produce the extraordinary results we might have expected. This does
not bode well for the fourth-quarter and year-end results that
retailers will soon be reporting."
The holiday season is a crucial one for retailers, accounting
for a good chunk of annual sales.
December sales "continued very strong at Macy's and
Bloomingdale's, and we are solidly on track to exceed our
expectations for same-store sales in the fourth quarter," said
Macy's Chief Executive Terry Lundgren.
"We have great confidence in the future," Lundgren added. The
retailer's December results were boosted by a 35.8% rise in online
sales.
Target cited weakness in electronics, music, movies and books.
Sales and traffic were strongest in the week leading up to
Christmas as customers waited to shop for last-minute gifts, Chief
Executive Gregg Steinhafel said.
J.C. Penney (JCP) posted a 0.3% rise in comparable-store sales
when a 0.1% decline was expected but said comparable-store sales
for the fourth quarter will be down slightly compared with last
year because of a softer sales performance during the holiday
season.
Kohl's Corp. (KSS) posted a 0.1% drop in same-store sales when a
2.2% rise was expected and reduced its fourth-quarter earnings
view. The department store cited sluggish sales in cold weather
wear given unseasonably warm temperatures during the holiday
season.
Gap Inc. (GPS) posted a 4% drop in same-store sales, when 1.3%
decline was expected. "We expected December to be highly
promotional, and while we competed aggressively across our brands
our performance was below our expectations," said Chief Executive
Glenn Murphy. "That said, we are encouraged by bright spots across
our business, and we're clear and focused on what needs to be fixed
in order to improve our sales trend" this year.
Shoppers have become conditioned to only pay certain prices and
that hurt retailers during the holidays, analysts said. "Even
though consumers are willing to spend they will only spent when
there is huge discounting," David Bassuk, head of the retail
practice at AlixPartners. "A number of retailers couldn't bring in
enough dollars in that environment."
Upscale department stores still remain somewhat immune.
Nordstrom Inc. (JWN) posted an 8.7% increase when 5.1% was
projected and Saks Inc. (SKS) met expectations with a 5.8%
rise.
Costco Wholesale Corp. (COST) said U.S. same-store sales
excluding fuel rose 6% in December from a year earlier, meeting the
expectations of analysts surveyed by Thomson Reuters.
Limited Brands Inc. (LTD) reported sales at stores open more
than a year in December grew 7% when 5.7% was expected and the
operator of Victoria's Secret and Bath & Body Works raised its
fourth-quarter earnings expectations.
The 22 retailers tracked by Thomson Reuters showed a gain of
3.4% when 3.3% was expected. That compares with 3.1% a year
earlier. For the November and December Christmas season, same-store
sales rose 3.1% growth. That compares with 4.3% in 2010 after
softness the year before because of the recession. The reporting
group doesn't include major holiday merchants Wal-Mart Stores Inc.
(WMT), Amazon.com Inc. (AMZN) and Toys R Us.
American Eagle Outfitters Inc. (AEO) slashed its fiscal
fourth-quarter earnings guidance as the teen-apparel retailer
offered more aggressive promotions to drive late holiday sales.
Stein Mart Inc. (SMRT) reported flat same-store sales when a 1%
decline was expected. Children's Place Retail Stores Inc. (PLCE)
and Bon-Ton Stores Inc. (BONT) floundered, with both saying warm
weather made winter wear unappealing and both lowered their
earnings guidance. Similar comments about the weather may be
expected from other retailers as they report.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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