December Same-Store Sales Are Coming In Mixed For US Retailers
January 05 2012 - 7:35AM
Dow Jones News
U.S. retailers are turning in mixed sales for the December
holiday period as consumers in many cases were attracted by deep
promotions and longer shopping hours but remained concerned about
their financial condition.
December was initially seen as an uncertain month, with tempered
expectations because of lingering softness in employment and
housing, among other constraints on consumers. Warmer weather also
was a factor in making winterware in some parts of the country less
appealing.
But December sales got a boost as Sunday of the Black Friday
weekend and Cyber Monday fell during the month. There also was a
big push to buy in the week leading up to Christmas.
Overall, "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 so far are 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 their annual sales.
Among the early reporters, warehouse club 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 are expected to show
a gain of 3.3% once all are heard from. That compares with 3.1% a
year earlier. The expectation for the November and December
Christmas season is for 3.1% growth. That compares with 4.3% a year
earlier after softness the year before because of the
recession.
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.
Citigroup earlier this week lowered its December same-store
estimates for Macy's Inc. (M), Target Corp. (TGT), Kohl's Corp.
(KSS) and J.C. Penney Co. (JCP), feeling that while holiday sales
were robust, the persistence of warmer weather in December hit
sales of cold weather seasonal merchandise.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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