Blizzard Tarnish December Retail Sales

Strong November Blizzard Tarnish December Retail Sales

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Blizzard Tarnish December Retail SalesNew York–Despite the fact retail sales for November and December posted the strongest performance since 2006, December sales results released today came in below Wall Street’s expectations.

Retail Metrics, which tracks the monthly data, said its index of same-store sales data rose 3.2% compared to December 2009. But that increase fell short of the 3.5% forecast retail analysts had expected. Still, the index for the two holiday shopping months of November and December was up 4.1% against a year ago, the best showing in four years.

Blizzard Chills Sales After Christmas

Several retailers reported that December sales weakened after the strong performance seen in November, as consumers pulled back on spending. Other retailers pointed to a post Christmas blizzard that hampered sales in the crucial final weeks of the year. The disappointing retail sales contrasted with Wednesday’s economic data showing a much stronger-than-expected gain in private-sector jobs for December, news that buoyed optimism about the Labor Department’s unemployment report due Friday.

The retail weakness “was both surprising and disturbing, but the fact that it was so broadly based makes me think it had more to do with weather than fundamentals,” said Walter Todd, at Greenwood Capital Associates.

Retailers ranging from Macy’s Inc and Target Corp to teen retailers such as American Eagle Outfitters were among those whose results fell far short of forecasts. Abercrombie & Fitch Co., was a standout in the teen group, with its heavy discounting taking consumer from its rivals.

“The turbulence is here to stay,” said David Bassuk, a managing director at consulting firm AlixPartners. “The consumer is still very sensitive to even slight fluctuations in prices–the consumer is still looking for deals.”

Accessories Among Top Sellers

Luxury continued its strong comeback, with Saks Inc. posting 11.8% comparable-store sales growth, when 3.9% was projected. Nordstrom reported an 8.4% increase, beating forecasts of 3.4%.

The massive East Coast snowstorm disrupted shopping the week after Christmas, which accounts for 15% of seasonal sales. ShopperTrak said Wednesday that retailers did not make up all of the $1 billion in retail sales lost from shoppers put off because of the storm.

Some analysts think consumers may have pushed off sales until this month. “Snowstorms do not destroy demand, they simply displace demand,” said Customer Growth Partners’ Craig Johnson.” Those gift cards don’t disappear, they get redeemed in January.”

Among the stores reporting December sales results are:

●Macy’s same sales increased 4.5%  to $4.62 billion. The department store retailer said its same store sales were up 3.9%, missing analysts’ average estimates of a 4.5% increase. “Sales in December were strong at both Macy’s and Bloomingdale’s, consistent with our high expectations, despite snowstorms that disrupted after-Christmas shopping along the East Coast,” Terry Lundgren, ceo. “While value remains important to customers in this uncertain economic environment, fashion, newness and unique gift items were drivers of our business throughout this holiday season.”

Year-to-date sales for Macy’s totaled $23.7 billion, up 6.6% from total sales of $22.2 billion in fiscal 2009. Online sales saw the strongest growth, with sales increasing 28.4%.

The company reiterated its guidance for sales and earnings in the fourth quarter 2010. Same-store sales for the fourth quarter are projected to be up 3.5% to 4.5% and earnings guidance for the fourth quarter is $1.44 to $1.49 per share. For the year, 2010 earnings of $1.96 to $2.01 per share are expected

JCPenney reported a 3.7% rise in December comparable-store sales with fine jewelry and women’s accessories reporting the strongest results, compared to a 3.8% drop in comparable sales last year. Geographically, the best performing regions were the southeast and northeast regions. Total company sales for the five-week period ended January 1 improved 2.3% to $2.955 billion from $2.89 billion in the same period 2009. Comparable store sales increase of 9.2% for November with a strong Thanksgiving weekend, and total company sales grew 7.2% to $1.84 billion.

Reporting strong holiday sales, the store said among the top sellers were fashion watches and sterling silver jewelry, St. John’s Bay and Liz Claiborne cold weather merchandise.

Kohl’s same-store sales rose 3.9% in December, but missed retail analysts’ average forecast for a 4.3% comparable store increase. For the five weeks ended Jan. 1, Kohl’s said total revenue climbed 5.9% to $3.19 billion with its online revenue surged 66%.

Year-to-date revenue at stores open at least a year increased 4.6%, with total revenue up 7.2% to $17.57 billion. The department store also raised the low ends of its fourth-quarter and full-year earnings outlooks, but the full-year guidance is below analysts’ estimates.

Dillard’s said December same-store sales rose 7% while total sales were up 6%. Total sales for the month were $1.07 million, up from $1.01 million during the comparable period last year. Sales for the 48-weeks period that ended Jan. 1 reached $5.64 million, up 2% from the same time last year. Same-store sales rose 3%, the company said. As for top selling classifications, Dillard’s reported footwear sales were “significantly above trend,” while cosmetics sales were ” significantly below trend.”

 ●Neiman Marcus said sales in its Neiman Marcus and Bergdorf Goodman stores open at least a year rose 5.1% in December, while its comparable revenue from online and catalog operations grew more slowly. The company’s online and catalog revenue rose 3.2% Total revenue was $585 million overall, up 4.9% from $556 million a year earlier. Sales growth was strongest at stores in the Northeast, Southeast and Texas, the company said. Top sellers included women’s fine apparel, men’s clothes, footwear, handbags and beauty.

●Nordstrom’s December retail sales increased 11.9% to $1.39 billion from $1.25 billion in the same month last year. Same-store sales for the month improved 8.4% from the same period 2009. Nordstrom’s same-store sales for its namesake store increased 8.3% while Nordstrom Rack same-store sales rose 7.0% from last year. Total retail sales for the year-to-date period were $8.70 billion, up 12.8% from last year. Same-store sales for the period improved 8.3% year-over-year

 ●Saks posted 11.8% increase in the comparable store sales for December, with a 9.8% rise in total sales to $432.2 million from $393.7 million a year ago. The results reflected strong performance by Saks Fifth Avenue stores including women’s and men’s apparel, shoes, handbags, and cosmetics. Saks Direct performed well during the month, the company noted.

The Bon Ton‘s comparable store sales edged up 0.1%, while total sales dropped 0.1% to $510.8 million from $511.1 million for the same period 2009. Tony Buccina, vice chairman and president merchandising, stated that the monthly comparable store sales came in positive over the prior year period despite severe snow storms, which is estimated to affect results.  Buccina said fine jewelry, both hard and soft home, accessories, shoes and furniture were the best performing businesses, while ladies’ ready-to-wear, children’s and intimate apparel were weak. E-commerce sales more than doubled from the prior-year period

Stage Stores‘ December same store sales rose 1.9%, compared to 2.2% decline last year. The company experienced comparable store sales growth in its accessories, cosmetics, footwear, gifts, junior’s and men’s categories. Total sales for December period increased 4.4% to $266 million from $255 million last year.

Andy Hall, president and ceo, commented, “Our new stores performed well, all regions of the country generated positive comparable store sales results, our small market stores outperformed our larger stores, and our e-commerce platform was successfully launched.” He added that the company is optimistic about January and expect the comparable store sales increase for the fourth quarter to be near the high end of its guidance range of 1% to 3%.

●Target said its comparable store revenue edged up 0.9% in December, but it fell well short of analysts’ average expectations for a 4% rise. Total sales for December ended rose about 1% to $9.88 billion. Target said it sold more goods earlier and at lower prices than expected and it said weakness in electronics, toys and some home categories offset strength in grocery and apparel.

Nonetheless, Target continues to expect its fourth-quarter revenue at stores open at least a year to be 2% to 4% higher than 2009 and it said it can meet analysts’ expectations for earnings of $1.40 per share. “Sales in some key gift-giving categories moved earlier into the holiday season, and lower-margin items drove a higher portion of sales than expected,” said Gregg Steinhafel, ceo. For the fiscal year so far, Target said its revenue in stores open at least one year is up 2.1% and total revenue is up 4% to $61.4 billion.

Gap Inc.’s same-store revenue fell 3% in December, surprising retail analysts who had expected an increase of 2.6%. However, the mass merchant also maintained its full-year earnings guidance below analysts’ expectations. “After a strong start to the holiday season in November, sales and traffic trends for our brands were less consistent in December,” Sabrina Simmons, chief financial officer, said.

Revenue at Gap North America stores open at least a year fell 8%. At Old Navy North America stores the figure was down 2%. International results declined 4%. Banana Republic North America was the bright spot posting same store sales edged up 1%. Total revenue for December was essentially flat at $2 billion. Year-to-date revenue at stores open at least a year increased 1%, with total revenue up 3% to $13.82 billion. The company maintained its forecast for full-year earnings between $1.77 and $1.82 per share. Analysts’ estimates anticipate earnings of $1.83 per share.

● Limited Brands reported increases in both same store sales and total sales for the month of December. Comparable store sales increased 5% for December compared to a decrease of 2% in the same period last year. Retail analysts’ average estimate was a 4.6% increase in comparable store sales for the month. December net sales increased to $1.79 billion from $1.66 billion in the year-ago period. At Victoria’s Secret, same store sales growth was 8% and at Bath and Body Works, the increase was 4%. However, same store ales dropped 7% at La Senza.

● Abercrombie & Fitch said its December comparable-store sales grew by 15%. The company reported net sales of $596.3 million for December, a 26% increase from net sales of $473.3 million in the previous year. Total company sales increased 59% to $66.9 million. For the fiscal month, total company international net sales, including direct-to-consumer net sales, were up 65% to $115.9 million. Comparable-store sales improved 17% for the quarter-to-date period. Quarter-to-date, the company posted net sales of $915.3 million, up 28% from net sales of $714.5 million last year.

American Eagle Outfitters cut its fourth-quarter earnings outlook, saying December results were weaker than the previous month. December same store sales fell 11% from a year ago. Total December sales were down by 6% to $499 million, compared to $531 million a year ago. Consequently, the company lowered its fourth-quarter earnings guidance to a range of 41 to 43 cents a share, a drop from the 43 to 46 cents projected before. However, American Eagle said its total sales for the year to date ended Jan. 1 are up by 1% to $2.82 billion.

● Aeropostale that its December same-store sales decreased 5% compared with an increase of 10% in the year-ago period. Total net sales for the month increased 3% to $474.7 million from $460.8 million for in December 2009. In addition, the company reaffirmed its previously issued fourth-quarter guidance range of about $0.94 to $0.96 per share.

● Buckle Inc. said comparable store net sales for December increased 6.1% from last year, while net sales grew 10.0% to $161.8 million. Analysts expected the company to report a 4.9% increase in comparable store sales. For the 48-week period, the company’s comparable store net sales increased 1.0%, while net sales rose 5.6% to $895.5 million.

● Wet Seal said its same store sales for December declined 2.1%, reflecting pressure on merchandise margin at its Wet Seal division. This compares to a 4.6% decline last year. Analysts’ averages expected a 2.8% increase in same store sales. Comparable store sales at the Wet Seal declined 3.7%, compared to a 7.3% decline in the prior-year period. Comparable store sales at Arden B increased 8.5% compared to an increase of 14.1% in the same period last year.

Ed Thomas, interim president/ceo said, “December comparable store sales results came in slightly below our expectations, with lower than planned results at Wet Seal partially offset by a strong month at Arden B. At Wet Seal, sales increased significantly in the final few days before Christmas and in the week thereafter, but not enough to offset softer sales in the first few weeks of the month.” December total sales grew 4.8% to $79.4 million, reflecting a 3.3% increase in sales at Wet Sales and 13.4% growth in net sales at Arden B. The company noted that online sales for the month rose nearly 26% from last year.

●Urban Outfitters  said revenue at stores open at least a year was flat for November and December. Including online and catalog sales, the figure rose 5%. Results were up 3% at Anthropologie and 30% at Free People, while Urban Outfitters posted a 6% rise. Total revenue increased 15% to $520 million/ Web and catalog revenue climbed 28% on double-digit growth from all brands. Wholesale revenue increased 32%.

●Hot Topic reported a 1.7% decline in its comparable store sales for December. Total monthly sales decreased 0.1% to $118.8 million. Year to date comparable store sales were down 5.5%. Total sales for year to date declined 4% to $669 million.

● Ross Stores reported strong sales performance as shoppers sought bargains. Total December sales reached $1.008 billion, up 8% compared with the same period a year earlier. Although Ross had had been cautious about same store sales, they grew 4% on top of a 12% gain a year ago.

Michael Balmuth, vice chairman/ceo, said not only did results exceed the company’s expectations, but that they were also “especially noteworthy considering the very challenging prior year comparisons.” The company raised its fourth quarter earnings estimates to between $1.32 and $1.34 per share. That would be about 14% higher than a year earlier. Nevertheless, Ross is expecting same store sales to fall 1% or 2% in January.

● TJX, which operates T.J. Maxx, Marshalls, and HomeGoods, said same-store sales rose 2% in December, exceeding company expectations. Total sales wer3 $3 billion, up 6% from the comparable period a year ago. For the fourth quarter, TJX said it now expects earnings per share on a reported basis to be in the range of $.70 to $.71 compared to prior guidance, adjusted for the closing of the A.J. Wright business, of $.62 to $.64 per share.

Carol Meyrowitz, president/ceo said: “I am extremely pleased with December’s sales results, as we significantly exceeded our plans during this important period. Our 2% comp store sales growth was achieved on top of a very strong 14% increase last year, a much more difficult comparison than those faced by most other retailers, with our largest business, Marmaxx, delivering a 2% comp store sales increase over a 15% increase last year. We enter January with inventories well positioned to capitalize on the great opportunities we are seeing in the marketplace.”

 ● Cato Corp. reported that same store sales for the month were flat. Total sales were $106.6 million, compared to $104 million in the same month last year. John Cato, chairman, president, said that December same-store sales results were impacted by a difficult comparison to the prior year.  Cato said it now estimates fourth quarter earnings per share to be toward the lower end of its original guidance range of $0.25 to $0.28 versus $0.25 last year.

● Stein Mart reported a 1.9% decline in comparable store sales for December, citing a negative impact from by adverse weather in the Midwest, Northeast and parts of the Southeast. Total sales for the December were $166.3 million, a decrease of 2.3% from $170.2 million in the same period 2009. Classifications that exceeded company trend included ladies’ special sizes

● Costco Wholesale Corp posted a 6% rise in December same store sales. The company recorded 12% same-store sales growth at its international segment, while U.S. same-store sales rose 4% during the period. Total rose 11% to $9.19 billion from $8.26 billion last year.

●BJ’s Wholesale reported December sales rose 7.3% to $1.25 billion from last year. Same store sales for the month rose 3.8% (or just 1.4% excluding gasoline.) falling well below analysts’ average projections of comp sales of 4.4% and 3.4% (with and without gasoline, respectively). BJ’s Wholesale also announced it would be cutting 494 jobs as it closes five underperforming stores and restructures its Natick headquarters. The closings will cost 380 workers their jobs.

Laura Sen, president/ceo said: “The savings associated with the actions . . . will be invested in new clubs, remodels and information technology, all of which are vital to our competitiveness, future growth and profitability.” A company spokesperson declined comment on whether the store closings and restructuring were tied to takeover talk about BJ’s.

● Zumiez reported a 9.2% increase in comparable store sales December. Total net sales increased 14.1% to $88.5 million from $77.6 million last year.

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