New York—Thankfully, many U.S. retailers reported today that their holiday shopping seasons, particularly since Thanksgiving, are off to a strong start. But in most cases, the Black Friday sales were still not strong enough to counter the effects of Superstorm Sandy, which struck the Mid-Atlantic and Northeastern states, effectively forcing many stores to close and decreasing demand.
Sandy, which hit the East Coast on Monday, Oct. 29, basically resulted in a week’s worth of lost retail sales. Moreover, November sales, which are calculated as the four weeks ending Nov. 24 or 25, didn’t include Cyber Monday sales which were reportedly very strong this year.
“We would probably have seen just blockbuster numbers had it not been for Sandy and the nor’easter, the back-to-back storms in the Northeast,” said Alison Paul, U.S. retail and distribution leader and vice chairman for advisory and consulting firm Deloitte.
The two storms and resulting massive power outages and damage “really wiped out a week or two of any retail activity in the most populated part of the country,” she said.
Among the retailers reporting larger-than-expected declines were Macy’s Inc., Kohl’s, Nordstrom, Bon-Ton Stores, Target, Wet Seal, Cato and Buckle. According to Retail Metrics, total comparable store sales rose 1.6% compared to a year ago, missing analysts’ lowered expectation for a 3.5% increase. In fact, 74% of stores reporting today missed analysts’ views on their comp stores.
December Comps Expected to Rise About 4%
Ken Perkins, president at Retail Metrics, attributed the overall weakness in November to the disruption caused by Hurricane Sandy, as well as the presidential election. December sales are looking promising, he noted.
November sales figures also may omit online shopping and layaway sales, which are up, added Michael Niemira, chief economist at the International Council of Shopping Centers (ICSC). Since retailers don’t include layaway sales until they are fully paid for and don’t record online sales until merchandise is shipped, Niemira said he expects both layaway and online shopping to help comparable store sales in December.
Some retailers bucked the trend and reported increases: Stage Stores, Limited Brands, Ross Stores, Stein Mart, TJX Companies and Costco to name a few.
Fitch Ratings said Wednesday that it expected 2012 holiday retail sales to grow between 3% and 4%, down from a 5.6% increase in 2011, despite the strong Black Friday showing.
The National Retail Federation (NRF) still expects sales in November and December to rise 4.1% this year, below last year’s 5.6% increase. Total spending increased 12.8% to $59.1 billion over the long Thanksgiving weekend, according to an NRF survey.
Deloitte still expects a 3.5% to 4% rise in holiday sales, Paul said.
The ICSC has predicted that December comp sales may rise 4% to 4.5% with overall comp store sales for November-December to increase 3%.
Below are November sales reports from major retailers that still report monthly figures. These retailers only represent about 13% of total retail and don’t include major retailers such as Walmart, JCPenney, Dillard’s, and Sears Holdings that no longer such figures.
●Macy’s Inc. reported sales edged down 0.6% to $2.46 billion in November despite the fact the department store group reported its largest-ever Black Friday weekend by volume. Comparable store sales fell 0.7% weaker than the 1.5% gain that analysts’ estimates expected.
“Despite the largest-volume Thanksgiving weekend in our company’s history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy,” said Terry Lundgren, chairman/ceo. “Yet we remain on track to deliver a very strong sales performance in the fourth quarter, consistent with our guidance.”
Macy’s reiterated its fourth quarter earnings guidance for adjusted earnings in the range of $1.94 to $1.99 a share with comparable store sales up 4.2%. Analysts’ consensus, however, calls for higher earnings, $2.01 a share on sales of $9.39 billion.
●Kohl’s posted a 5.6% drop in its comparable store sales last month, a surprise since analysts’ average estimate expected a 1.9% increase. Total sales fell 4.9% to $1.84 billion.
The weakest regions were the Mid-Atlantic and Northeast, which were affected by Superstorm Sandy, but Kohl’s said all regions reported negative sales for the month.
Although November sales came in below expectations, Kevin Mansell, chairman/ceo/president, said results improved over Thanksgiving week. He noted that Black Friday-related sales seemed to shift to online, where sales rose more than 50%. Most of those sales, however, will be included in December figures.
●Nordstrom Inc. reports its November comparable store sales fell 1.1%, hurt by a weak shopper response to a key semi-annual sale in the first half of the month. Analysts’ average estimate expected an increase of 4.3%. Total sales rose 1.8% to $926 million.
By division, comp sales fell 2% at Nordstrom stores while comparable store sales rose 4.3% at Nordstrom Rack.
Besides the disappointing results in the first two weeks of the month to its half-yearly sales for women and children, Nordstrom said sales were hurt by store closures in the Northeast and Mid-Atlantic regions due to Superstorm Sandy.
●Bon-Ton Stores Inc. said its stores felt the effects of Superstorm Sandy earlier in the month, but that sales recovered. In fact, Black Friday, Nov. 23, sales were better than last year.
For the four weeks ended Nov. 24, Bon-Ton said total sales fell 0.8% to $301.3 million. Comparable store sales were down 0.1%. Bestselling categories included ready-to-wear, fine jewelry, cosmetics, accessories, men’s cold weather clothing. The company reported “record online orders” since Thanksgiving, most of which will be included in its December results.
●Stage Stores reported its November comparable store sales soared 13.2%, well ahead of the 3% increase analysts’ average estimate expected. Total revenue rose 16% to $141 million.
The November figure, which includes sales through Nov. 24, included a particularly strong Black Friday. Stage Stores opened on Thanksgiving Day for the first time this year, from 8 p.m. to midnight. Michael Glazer, chief executive, said this strategy worked well for the company, and he was optimistic about December.
Stage Stores, which operates 865 stores in 40 states under the Bealls, Goody’s, Palais Royal, Peebles, Stage and Steele’s names, reported sales were particularly strong for cosmetics, footwear, junior sportswear, petites and home and gifts
●Target Corp. said its November comparable store sales fell 1% hurt by weak sales in the first two weeks of the month. The Minneapolis-based company says total revenue for the four weeks ended Nov. 24 was nearly flat at $6.18 billion.
Analysts’ average estimate expected a 2.1% rise in its comp sales.
Target said stronger sales later in the month helped offset the slow first couple of weeks. The South was its strongest region, while the Northeast, hard hit by Superstorm Sandy, was weaker.
Looking ahead, Target forecas5 a low-single digit percentage increase for its December comparable store sales.
●Gap Inc. reported that November net sales increased 3% to $1.52 billion. Total comparable store sales rose 3% compared with a 5% decrease in November 2011. Analysts’ estimate expected a comp store increase of 3.9%.
“Customers continue to respond positively to our product this year, enabling us to deliver consistent comp sales growth in North America,” said Glenn Murphy, chairman and chief executive officer of Gap Inc. “As we head into the thick of the holiday selling season, we’re confident and ready to compete across all our brands and channels.”
By division, Gap North American posted a 5% increase in comp store sales vs. a 2% decline a year ago. Banana Republic had a 3% comp store increase vs. flat last year. Old Navy North America posted a 1% increase in comp sales vs. a 7% decrease last year. The company’s international division had a 3% comp store increase vs. a 9% decrease last year.
●Limited Brands Inc., operator of Victoria’s Secret, Bath & Body Works and other stores, said its November comparable store sales rose 5%, topping analysts’ estimate for a 3.1% increase. Total revenue rose nearly 6% to $922 million.
●Cato Corp. reported its November total sales declined 2% to $64.9 million. Comparable store sales also fell 2%.
“November same-store sales were in line with our year-to-date trend,” said John Cato, president/ceo. He added that the company’s inventory is well-positioned as it moves into the holiday selling season.
●Buckle Inc. said its November comparable store sales fell 0.1%, falling short of analysts’ estimate for a 2% increase. Total sales rose almost 2% to $96.7 million.
Sales of men’s merchandise increased 5%, while sales of women’s merchandise edged up 0.5%. Shoe sales increased 18%, but sales of accessories were unchanged, the company said.
●Wet Seal, Inc. said its total November sales declined 4.6% to $48.8 million. Comparable store sales decreased 5.4%, but less than the 6.8% drop analysts expected. The teen retailer, said the results were “modestly” ahead of its expectations and estimated that Superstorm Sandy reduced its comp store sales by about 1%.
The continued re-merchandising efforts at Wet Seal drove sequential improvement in sales trend as the month progressed.
● Zumiez Inc. reported preliminary November comparable store sales up 1.6% compared with a 3.3% increase analysts expected.
●Ross Stores, Inc. reported total sales increased 6% to $813 million. Comparable store sales grew 2% on top of a 5% increase in the prior year. Analysts’ consensus expected a comp store increase of 2.8%.
“November same store sales were slightly ahead of our expectations of flat to up 1%,” said Michael Balmuth, vice chairman/ceo. “We achieved these results despite unseasonably warm weather in the Western U.S. during the first half of the month. We are encouraged that our sales strengthened as weather normalized during the final two weeks.”
Looking ahead, Balmuth added: “While we are pleased with our above-plan results in November, most of the holiday shopping period is still ahead of us. As a result, we continue to project comparable store sales gains of 2% to 3% and 1% to 2% for December and January, respectively.”
●Stein Mart posted a 7.1% increase in its November comparable store sales. Total sales were up 7.5% to $109.8 million.
All merchandise categories posted positive comps for the month with linens, men’s furnishings and ladies’ career sportswear performing the best and ladies’ casual sportswear, ladies’ accessories and dresses performing lower than the chain. Geographically, sales increased in every state except New Jersey, with the Gulf States and the Southeast performing better than the chain and the West slightly lower.
“Our goal was to generate positive comp sales during the holiday selling season and we are off to a terrific start,” said Jay Stein, interim chief executive. “The results were clearly a culmination of great merchandise, great marketing and proper execution at all levels,”
The company also announced a special dividend of $1 per common share, the dividend pays Dec. 24 to shareholders of record as of Dec. 10. It is expected to total about $44 million.
●TJX Cos., which operates off-price chains such as T.J. Maxx, Marshalls, and HomeGoods, said comparable store sales were up “above plan” 3% in November. Analysts’ average estimate expected a 3.6% increase. Total sales were up 7% to $2.2 billion.
Saying she was pleased with the November sales results, Carol Meyrowitz, chief executive, said: “Business throughout the Thanksgiving week and weekend was robust, even as we remained true to our off-price practice of offering great values every day, and stayed out of the fray of Black Friday promotions. Customer traffic drove the comp increase again this month as consumers continued to be drawn to the extreme values on our compelling, always-fresh, branded merchandise mix.”
●Costco Wholesale Corp. reported its November comparable sales rose 6%. Excluding the effects of gasoline prices and currency fluctuations, monthly growth was 5%, unchanged from October. International comp store sales were up 5%. Total November net sales jumped 9% to $8.15 billion.
Costco also announced a special dividend of $7 a share totaling about $3 billion as it returns cash to investors.
Costco is among a growing number of U.S. companies, from Wynn Resorts Ltd. to Tyson Foods Inc., which are announcing special dividends at four times the pace of last year ahead of pending tax increases in 2013. The rate on dividends, which was reduced to 15% during the George W. Bush administration, is set to go up as President Obama and Congress work to draw more revenue from top income earners.
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