Post Holiday Blues: Bon-Ton, Stage Stores, Lululemon, Express Lower Forecasts

Retailers stepped up price-off promotions during holiday as trafffic slowed.

Retailers stepped up price-off promotions during holiday as traffic slowed.

●Bon-Ton Stores said Friday that bad weather conditions in many of its selling areas hurt its December comparable stores sales and as a result the department store retailer cut its earnings forecast.

“We are disappointed with the deceleration in sales during December, particularly given the strong start to the holiday season beginning with Black Friday and extending through the early part of the month,” the company said. “Despite the sales shortfall, due to our continued strategic inventory reductions, we ended the month with inventory levels well below that of the prior year, which positions us well as we transition into the spring season. We believe that we are heading in the right direction with our merchandise assortment and will continue to focus on executing our long-term initiatives while managing through a difficult retail environment.”

Now Bon Ton expects its full year earnings will be between a loss of 30 cents a share to a profit of 15 cents a share, that’s down from its previous projection for 15 to 75 cents a share profit. Full year comp sales are expected to be down about 3.5%.

Analysts’ estimate has been for earnings of 78 cents a share.

●Stage Stores today blamed the highly promotional retail environment and a drop off in traffic after a strong Black Friday for the 1.5% decline in its comparable store sales for the November/December holiday period. Total revenue for the holiday period slipped to $427 million from $428 million.

“Traffic slowed in the weeks leading to Christmas and we were not able to maintain our early positive sales trend,” said President/CEO Michael Glazer. “Our overall performance was impacted by the highly promotional sales environment for apparel retailers as well as the difficult retail calendar.”

Best performing categories included outerwear, footwear, cosmetics and children’s. The strongest regions included the South Central, Southeast and Northwest.

Consequently, the department store company lowered its full fiscal year forecast to adjusted earnings of $1.10 to $1.15 a share, down from a prior outlook of $1.20 to $1.30 a share. Analysts expect earnings of $1.25 a share.

●Vancouver-based Lululemon Athletica today said that while sales had been on track through December, sales trends so far this month “decelerate meaningfully,” said John Currie, chief financial officer.

Therefore, for its fourth quarter, Lululemon now expects net revenue will be in the range of $513 million to $518 million, down from its previous estimate for $535 million to $540 million. Comparable store sales are expected to decline 1% to 5%.

Earnings are now expected to be in the range of 71 cents to 73 cents for the quarter, down from a range of 78 cents to 80 cents.

●Express CEO Michael Weiss said the retailer had a bigger than expected traffic drop in December, which led to more promotions and deeper discounts.

“January traffic to date has been weak and we have remained promotional and expect to maintain this stance throughout the month,” Weiss said. “While we believe the actions we took, and are taking, are appropriate, it does require us to adjust our fourth quarter and full year guidance accordingly.”

Express now estimates that its comp sales will range from flat to a low-single digit increase for its first quarter. Net earnings are expected in the range of $48 to $52 million, down from its previous forecast for $56 million to $60 million.

 

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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com