October Retail Comps Up; Sandy Effects Yet to be Felt

In Reports, What's New, Industry News by Accessories Staff

A boarded up Saks Fifth Avenue flagship on Fifth Avenue in the aftermath of Hurricane Sandy. Saks, along with other retailers, have mostly reopened stores in New York City.

New York—While October retail comparable store sales increased nearly 5%, some retailers cautioned today that their November—and even holiday totals—could be adversely affected by the Superstorm Sandy.

Of the 17 retailers (excluding drugstores) tracked by Thomson Reuters that posted October results today, overall comparable store sales rose 4.7% better than the 4.3% increase retail analysts had expected.

The results are for retail sales during the four weeks ending Oct. 27, so store closings and lost sales in the Northeast due to Hurricane Sandy and its aftermath aren’t reflected in the numbers.

However, the Sandy effect may be seen next month and beyond. Retailers, such as Costco and Nordstrom, expected their November sales to suffer due to the hurricane. The storm affected a huge, populated region from North Carolina to Maine, with the hardest hit regions being New York, New Jersey and Connecticut.

While the ICSC expects November comparable store sales to increase 4.5% to 5.5% compared with a 5% increase in November 2011,  Michael Niemira, ICSC’s chief economist, noted there are “considerable uncertainties” despite the optimistic forecast.

“We’ll see any negative impact from Sandy in coming weeks,” Niemira said.

At Macy’s Inc., where 200 Macy’s and Bloomingdale’s stores were closed for a few hours to multiple days, the company expects to rebound in coming weeks.

“We are feeling confident about our prospects for the upcoming holiday season and have increased our sales guidance for the fall season, despite the interruption caused by Hurricane Sandy in the first few days of the fourth quarter,” said Terry Lundgren, chairman/ceo.

Kohl’s Donates $1 Million to Red Cross

However, some retail in the New York metropolitan area, and New Jersey may feel the impact with consumers, who had to spend on generators and other recovery efforts, being hesitant to spend as much on their holiday gift budgets.

Other analysts report that estimates for a strong November may overcome any Sandy obstacles.

“November is so huge, the last few weeks of the month can be very big, and so if you are up and running by then, you should be OK,” said Rahul Sharma, analyst at retail consultants Neev Capital.

Meanwhile, Kohl’s announced today that it would donate $1 million cash to the American Red Cross to help with emergency supplies and services in the hurricane-devastated regions.

Below are October sales reports—and some third quarter previews—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.

Among the retailers reporting today were:

Macy’s, Inc. reported its October comparable store sales increased 4.1% ahead expectations for a 3.1% increase. Total sales increased 3.6% to $1.908 billion.

Online sales (macys.com and bloomingdales.com combined) were up 44.6% in October, 40.4% in the third quarter and 36.8% year-to-date.

“Business was strong in October, and we delivered a solid performance in the third quarter,” said Terry J. Lundgren, chairman, president and chief executive officer of Macy’s, Inc. “The key growth strategies we put in place three years ago continue to provide us new opportunities for continuous improvement in driving sales.”

•Kohl’s easily beat estimates for its comp sales: the department store posted a 3.3% rise in its comparable store sales, higher than the 1.2% increase analysts expected. Total revenue increased 4.6 % to $1.39 billion. Best performing category was children’s and the Midwest was the strongest region.

For the third quarter, comp store sales increased 1.1%. Total revenue grew 2.6% to $4.49 billion.

The company also announced today that beginning with its 2013 fiscal year it would “align with the wishes of its investors and the practice of the majority of its retail peers and no longer report monthly sales.”

•Nordstrom Inc. said comparable store rose 9.8% in October on strong demand for women’s, men’s and children’s apparel. That was better than the 6% increase analysts expected. Total sales rose 11.5% to $835 million. The company said its sales were strongest at stores in the Midwest and Northwest.

For the third quarter, comparable store sales increased 10.7%. Total sales rose 13.8% to $2.71 billion.

•Bon-Ton Stores posted October comparable store sales up 3.7%. Total sales rose 3.7% to $199.1 million. For the third quarter, comparable stores sales improved 1.9%. Total sales increased 1.9% to $668.7 million.

“We are pleased with our October comparable store sales performance. “Ladies’ and men’s outerwear, dresses and shoes posted strong double-digit gains,” said Brendan Hoffman, president/ceo. “Men’s sportswear and furnishings, cosmetics, accessories and ladies’ and special sizes sportswear outperformed the company average. Home, furniture and intimate apparel were the weakest performing categories. E-commerce continued to post double-digit gains.”

•Stage Stores, Inc. reported that total sales for October period increased 9.8% to $113 million. Comparable store sales increased 6.5%.

Best performing categories included: cosmetics, home & gifts, junior sportswear, men’s and misses sportswear. Geographically, all regions of the country achieved comparable store sales increases, with the Midwest, Northeast, South Central and Southwest regions outperforming.

•Target Corp. reported net retail sales for October were $4,982 million, an increase of 3.0%. Comparable store sales increased 2.4%.

For the full third quarter, comparable store sales were up 2.9% in line with the company’s forecast.

The company said it expects comp store sales to increase in the low-single digit range for November.

“As we enter the fourth quarter we feel very good about our holiday season merchandising and marketing plans and our ability to deliver outstanding value for our guests while generating strong financial performance for our shareholders,” said Gregg Steinhafel, chairman/president/ceo.

•Gap Inc. posted a 4% comparable store increase for October, just missing analysts’ estimates for a 5% increase. However, the retailer topped their estimates for third quarter. Total revenue rose 6% to $1.22 billion.

The company’s strongest showing in October was at its Gap division, where comp sales were up 6%. Its international division, however, posted a 2% drop in comp sales.

For the third quarter, comp sales rose 6%. The biggest improvement was at Old Navy, which posted a 9% gain in comp sales. International comp sales fell 3% the weakest performance. Total revenue for the quarter increased 8% to $3.86 billion.

•Limited Brands Inc. reported October comp sales increased 3%, below analysts’ recent estimate for 5% growth. Total October sales were $611.0 million, compared to net sales of $652.4 million last year.

For its third quarter, Limited posted a 5% increase in comp sales. Total sales in the quarter reached $2.050 billion, compared to net sales of $2.173 billion last year.

•Cato Corp. said its October comparable store sales remained flat to the prior year. Total monthly net sales were $64.3 million, a 3% increase.

Cato, which operates under the Cato, Cato Fashions, Cato Plus, It’s Fashion, and It’s Fashion Metro brands, also stated that third quarter comp sales declined 2%. Third quarter total sales were up 2% to $197.6 million.

•Buckle Inc. posted a 3.8% gain in its October comp sales, surprising analysts who had expected a 1.3% decline. Total sales were up 5.7% to $84.2 million.

Third quarter comparable store revenue was up 2. 4%, with total revenue up 3.9% to $284.1 million.

•Wet Seal Inc. reported its October comparable store sales dropped 7.6% on top of a 9.7% decline from October 2011. Analysts had expected an 11% decline. At its Wet Seal stores, comp sales dropped 6.9% and 11.5% at Arden B. Online sales rose 9.8%. Total revenue dropped 5.1% to $38.5 million.

For the third quarter, comp sales fell 13.5%, compared with a decline of nearly 1% in the same months last year. Online sales rose 8.7% while total net sales fell 10.9% to $135.5 million.

• Zumiez reported that October comparable store sales at stores increased 0.6%, lower than analysts’ expectations of a 4.6% increase of 4.6 percent. Total net sales for October increased 20.2% to $41.9 million.

After reporting recent sales that were lower than expectations, Zumiez lowered its third quarter guidance.”Based on total sales results for the quarter that were below planned sales, primarily due to a challenging sales environment in Europe, the company is revising guidance,” Zumiez officials said in a statement.

•Ross Stores’ October comparable store revenue grew 4%, missing analysts’ prediction for a 4.6% increase. Total monthly sales increased 8% to $715 million.

Third quarter comp store revenue rose 6%. Total quarterly revenue climbed 11% to $2.26 billion, matching expectations of analysts.

•Stein Mart said comparable store sales increased 1.7% for October versus an increase of 0.1% last year. Total sales were up 1.7% to  $87.2 million.

For the third quarter, comparable store sales increased 3.1% compared to a decrease of 2.9% last year. Total sales increased 4% to $268.9 million from $258.5 million.

•TJX Companies reported October total sales were up 11% to $2.1 billion. Comparable store sales increased 7%.

For its third quarter, the company said comp sales were up 8% while total net sales increased 10% to $18.2 billion.

“Our momentum continued at all divisions and customer traffic drove comp increases across the board, which we believe speaks to the staying power and appeal of our great brands and fashions at compelling values,” said Carol Meyrowitz, ceo. “We were particularly pleased with TJX Europe’s 11% comp sales increase, achieved over a 5% increase last year, as we continue to see increasingly strong trends in this important growth vehicle.”

Costco Wholesale Corporation reported October net sales rose 5% to $7.67 billion. Comp sales for the month rose 7%, easily topping analyst estimates of 6.6%. Excluding fuel sales and currency fluctuations, the company saw comp sales.

For its third quarter, the company reported net sales of $16.98 billion, an increase of 9% from $15.62 billion during the similar period last year.

Inflation in gasoline prices, as well as stronger foreign currencies, had a positive impact on comparable sales for both periods.

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