Black Friday Success Bolsters November Retail Comps

Black Friday shoppers like these in Tyson's Corner, Virginia, helped to kick off many retailers into a strong holiday start.

New York—A warmer than usual November along with consumers holding off spending for Black Friday weekend resulted in mixed comparable store sales last month.

Although comparable store sales for the 20 major retailers tracked by Thomas Reuters rose 3.1% in line with analysts’ average estimates, they were less robust as the 5.5% increase seen in November 2010.

The build-up to Black Friday—especially with stores opening earlier than ever, many at midnight after Thanksgiving—helped overall sales increases.

Among those retailers posting a strong start to the holiday season include Macy’s, Limited Brands, Ross Stores, Nordstrom and TJX. Disappointing comparable store sales were reported by Kohl’s, Gap and JCPenney.

“It’s definitely a mixed bag,” said Matt Arnold, a consumer analyst at Edward Jones inSt. Louis. “It almost seems like the chains that were catering to a higher-income consumer seemed to be more the winners and more discount-oriented chains, in many instances, got off to a weaker start.”

While majors such as Walmart and Amazon, which don’t release monthly sales figures, aren’t included in the results, other November retail sales reports released today point to similar results.

For instance, The International Council of Shopping Centers (ICSC) reported comparable store sales gain of 3.2% slightly under its projection for a 3.5% to 4% increase. Michael Niemira, chief economist of ICSC, said he expects December will be stronger, with same store sales up 3.5% to 4%.

The Big Question: How Will Holiday Sales Hold Up?

MasterCard’s SpendingPulse report for the four weeks from Oct. 30 to Nov. 26, reported sales rose 4.7% to $125 billion, compared with a 2.6% increase last year.

“The holiday season is off to a good start,” said Michael McNamara, vice president of research and analysis for MasterCard Advisors’ SpendingPulse. “But we have to see how it holds up. A lot of the season is still in front of us.”

A successful Black Friday may have made the month for many retailers. According to the National Retail Federation, total retail sales for the weekend reached an estimated $52.4 billion, up from $45 billion last year.

“Clearly, retailers bent over backwards to juice sales up for the holiday weekend, using tactics such as earlier doorbuster sales,” said Kurt Salmon retail strategist John Long.

The question on many economists and retail analysts’ minds, however, is will that momentum continue—especially without heavy-duty promotions to entice consumers to spend? And although such promotions may be necessary to sustain shopping through Dec. 25, they could come with a heavy price since many retailers’ gross margins are already pressured by rising costs.

“Whether the momentum will continue or whether retailers have simply pulled sales forward with too-good-to-resist promotions and longer store hours remains the big question,” Ellen Zentner, U.S. senior economist at Nomura Securities, said.

Among the stores reporting comparable store sales for the four week period ending Nov. 26. include:

●Macy’s Inc. reported a 4.8% increase in its total comparable store sales helped by a strong Black Friday when Macy’s stores opening earlier than ever. Analysts’ average estimate expected a 3.9% increase.

Total sales increased 5.3% sales to $2.34 billion. The company reported strong online sales increases, too: a 49.6% increase at macys.com and a 40.9% increase at Bloomingdales.com.

“Our success in November came on top of a very strong month last year and continued the upward trend in our business in stores and online,”  Terry Lundgren, ceo said.

● JCPenney reported its November comparable store sales decreased 2.0% compared with a 9.2% last year. Total sales decreased 5.9% to $1.73 billion.

Top performing categories included women’s and men’s apparel and accessories. The company said its Black Friday weekend sales were hampered by the “decision to respect Thanksgiving Day for families and open at 4 .m. on Friday as it had traditionally done” though its chief rivals chose to open earlier.

●Kohl’s reported its comparable store sales dropped 6.2% and total sales decreased 4.5% to $1.93 billion from $2.02 billion a year ago.

“We were encouraged by our improved performance in both stores and e-commerce over the Thanksgiving weekend. A majority of our planned incremental marketing investment is in December and we expect to be able to benefit as customers look for value as they complete their holiday shopping,” Kevin Mansell, ceo, said.

● Dillard’s, Inc. posted a 3% gain in its November comparable store sales. Total sales rose 2% to $479.19 million from $469.23 million in the prior year. Sales in the juniors’ and children’s category were significantly below trend, the company reported.

● The Bon-Ton reported its November comparable store sales fell 4.9%. Total sales Total sales also decreased 4.9% to $303.6 million, compared with $319.1 million a year ago. While Tony Buccina, vice chairman, president, merchandising, said Black Friday was the largest volume day in the company’s history, sales for the month fell short of expectations.

● Nordstrom Inc. posted a 5.6% increase in its November comparable store sales beating analysts’ average estimate for a 5% increase. Total sales rose 11.6% to $910 million. Increases included a 5.6% rise in sales at Nordstrom stores and a 7.8% increase at Nordstrom Rack. The company said that its results excluded sales made through HauteLook, a flash sale website it acquired earlier this year.

● Saks Inc.’s November comparable stores sales climbed 9.3% easily topping analysts’ average estimate for a 6.1% increase. Total revenue rose 8.7% to $277.1 million.

Top performing categories at itsSaks Fifth Avenuedivision included women’s and men’s contemporary apparel, handbags, fine jewelry, men’s shoes, cosmetics and fragrances

●Stage Stores said its total November comparable store sales rose 2.3% helped by a strong Black Friday. Total revenue rose 4.3% to $121 million. Top performing categories included accessories, cosmetics, footwear, juniors, home and gifts and young men’s.

Andy Hall, president/ceo, said the company is encouraged by the strong start to its holiday season and expects December sales to benefit from merchandising initiatives in cosmetics, cold weather items, gifts besides apparel and toys as well as online sales.

● Target posted a 1.8% rise in its comparable stores sales but missed analysts’ average estimate for a 2.8% increase. Total sales rose 3% to $6.19 billion.

The company said sales were strongest on Black Friday when it opened stores at midnight. Looking ahead to December, the company expects comparable store sales to increase in the low- to mid-single digits.

“November sales were near the low end of our expectations for the month as we compared against very strong performance last year,” said Gregg Steinhafel, chairman, president, ceo of Target Corporation. “Our view of December remains the same–we expect a competitive and promotional environment as consumers continue to focus on value.”

● Gap Inc. said its November comparable store sales fell 5%, more than a 4.3% decrease analysts’ average estimate expected. In November 2010, the store posted a 5% increase. Total sales also declined to $1.47 billion from $1.51 billion a year ago.

“This is just the start of the holiday selling season and we expect December to remain fiercely competitive and highly promotional,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “Our brands stand ready to compete at every opportunity to win customers over–in stores and online.”

Comparable store sales by division, which include comparable online sales, were: a 2% decline at Gap North American versus a 6% increase last year, flat at Banana Republic North American versus a 1% increase last year, a 7% decline at Old Navy North America compared to a 7% increase last year, and, a 9% decline in its international division which was flat last year.

● Limited Brands Inc. reported by its total November comparable store sales increased 7% across though revenue dropped 2.3% to $872.6 million due mostly to the sale of Mast Global Fashions, its third-party apparel sourcing division.

By division,Victoria’s Secret’s comparable store sales increased 11% and its Bath & Body Works had a 6% comparable store gain. La Senza, its lingerie stores, posted a 7% same store decline however.

● Cato Corp. posted a 5% decrease in its November comparable store sales. Total sales declined 3% to $63.6 million.

“November same-store sales reflect the continuing difficult environment for middle and lower income customers as well as a difficult comparison to the prior year,”  John Cato, chairman, president/ceo, said.

● Wet Seal Inc. said its November comparable store sales fell 3.1% versus a 7% increase in the same period a year ago. But analysts’ average estimate had expected a 6.8% decline. Total sales rose 0.8% to $51.1 million.

Its Wet Seal stores posted a 1.8% comparable store decline, which was better than expected Susan McGalla, ceo, said since the teen retailer had been “highly aggressive” in discounting a year ago.

At its Arden B. stores, comparable store sales fell 11.2%.”We will continue to carefully manage Arden B inventories as we identify opportunities for improvement,” McGalla said.

Although online sales fell 18%, McGalla said that was actually an improvement since the company is realigning merchandise online with that found in store.

● Buckle Inc. reported November comparable store sales increased 6.9% better than the 4% increase analysts’’ average estimate expected. Total revenue rose 9.2% to $94.9 million.

●Ross Stores said its November comparable store sales rose 5% helped by increase sales in junior’s and footwear. The increase exceeded the company’s own forecast for a 2% to 3% increase and analysts’’ average estimate expecting a 3.7% increase. Total sales rose 10% to $765 million.

The company said its results were helped by consumers’ continued focus on value-price merchandise. Best performing regions were the Southwest,Florida and California.

For December, the company forecast a comparable store sales increase between 3% to 5% and January to rise 1% to 2%.

● Stein Mart reported its November comparable store sales fell. 4.6%. Total sales fell 5.1% to $102.1 million.

Top performing categories included accessories and men’s furnishings, while dresses and career sportswear as well as home decor experienced weaker trends. Geographically, November sales in California and Texas, while sales were weaker in the Carolinas and theMidwest.

“We made progress in reducing our reliance on coupons this month, but not without some adverse impact to our sales,” said Jay Stein, interim ceo.  “Our day-to-day business was satisfactory, however, we realized major shortfalls as we anniversaried our largest events. It is important for our long-term competitive position that we differentiate ourselves by re-establishing the value of our merchandise offering through everyday low prices.”

● TJX, which operates T.J. Maxx, Marshalls, and HomeGoods, reported its total November comparable store sales increased 4%. Total sales were also up 4% to $2.04 billion.

Carol Meyrowitz, ceo, said sales increases were achieved “despite the unseasonably warm weather in November, which hampered demand for cold-weather apparel in the second half of the month.”

She added that TJX was off to “a very good start for the holidays” even though the company’s stores stayed “out of the fray of Black Friday promotions.”

● Costco Wholesale posted a 9% comparable store gain in November. Total net sales increased 11% to $7.51 billion

Inflation in gas prices had a positive impact on the comparable store sales, but foreign currency exchange had a slightly negative impact. Excluding these effects, comparable sales grew 7%, with a growth of 6% in the United States and 11% internationally, the company said.

 

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