November 20, 2019

After a Slow Start, Holiday Sales Improved

Many major American retailers were able to recover from a slow start to December shopping, according to monthly sales results reported on Thursday.

Despite early indications that the holiday season would be lackluster, the 17 apparel chains tracked by Thomson Reuters reported a 4.5 percent increase for December sales at stores open at least a year, exceeding the 3.3 percent gain analysts had expected.

However, Target, the nation’s second-biggest retailer after Walmart, said its December sales were flat.

Retailers relied on discounts to get that December revenue, which may hurt results when they report fourth-quarter profit.

“Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned,” said Kevin Mansell, Kohl’s chief executive. He said the company would take further markdowns as it prepares for spring.

The stores reporting sales data on Thursday ranged from apparel retailers to department stores, though some large retailers, including J. C. Penney and Saks Fifth Avenue, as well as Walmart, do not report monthly data.

Analysts noted a rush of last-minute promotions after slow sales early in the month.

“We’ve noticed significant promotions at retailers looking to recover preholiday sales, and fewer promotions at retailers we believe have performed well,” Oliver Chen, a Citigroup analyst, wrote in a research note.

With drugstores included in the totals, the rise in December retail sales from a year ago was 2.3 percent, Thomson Reuters said. Drugstores are dealing with consumers switching to cheaper generic drugs. ShopperTrak, which counts shoppers at the nation’s malls, reported that traffic picked up in the final week before Christmas. Still, in December it lowered its sales forecast for November and December to a 2.5 percent gain over last year, down from the 3.3 percent it had estimated previously.

Another reading on the holiday season was also tepid. MasterCard Advisors SpendingPulse, which estimates overall consumer spending, said last week that holiday-related sales rose 0.7 percent from the end of October through Christmas Eve, the smallest increase since 2008. Last year, sales were up 2 percent.

Most of the department stores reporting results Thursday beat analysts’ expectations.

At Nordstrom, sales at stores open at least a year, a measure known as same-store sales, were up 8.6 percent, shooting past estimates of 3.4 percent.

Kohl’s said its same-store sales rose 3.4 percent, above analysts’ estimates of 1.2 percent but below Kohl’s internal expectations.

Macy’s same-store sales were about in line with analysts’ expectations, at 4.1 percent. Macy’s said fourth-quarter earnings would be in a lower range than it had previously announced, at $1.91 to $1.96 a share, down from $1.94 to $1.99 a share.

Target, which heavily promotes the holiday season, said its same-store sales were flat compared with last December, while analysts had expected a 0.8 percent gain. Its heavily promoted collection of designer holiday gifts, in partnership with Neiman Marcus, was a disappointment, according to some analysts. The company said that the number of same-store transactions fell compared with last year, but the average amount spent per transaction rose, and that the food, health and beauty, apparel and home categories were up over last year.

“Strong results late in the month did not completely offset softness in the first three weeks,” Gregg W. Steinhafel, Target’s chief executive, said in a statement.

The discounter Costco did much better than expected, with a 9 percent same-store sales gain, above the 6.5 percent that analysts had projected.

Among apparel stores, the teenage clothing retailer Wet Seal posted a decrease of 9.7 percent and Zumiez posted a decline of 1 percent.

Article source: http://www.nytimes.com/2013/01/04/business/retailers-post-4-5-increase-in-december-sales.html?partner=rss&emc=rss

An October Lift for Retailers, but Storm’s Effects Will Come Next Month

Results tallied Thursday from the 18 national retailers tracked by Thomson Reuters showed an average increase of 2.7 percent in sales at stores open at least a year. The results largely excluded the effects of the hurricane.

Without the Rite Aid drugstore chain, though, that figure would have been 4.7 percent, above analysts’ expectations of a 4.3 percent increase. Rite Aid saw a decline mainly because of a shift toward cheaper generic drugs.

“You’re seeing solid single-digit numbers not just one month but consistently for the past few months,” said Madison Riley, managing director at the retail consulting firm Kurt Salmon. “It reflects a steadily improving economy and therefore, steadily improving consumer confidence.”

Still, all retailers’ eyes were on the impact of Hurricane Sandy. Most retailers’ fiscal October ended on Saturday, so while a few stock-up trips made it into the October results, most of those, along with poststorm spending and the impact of store closures, were not included in October results.

Some analysts have said that consumers may direct their money toward home repairs in the storm’s wake, rather than toward early holiday shopping. However, home improvement retailers and discounters might benefit from shopping for storm supplies.

Categories as various as department stores, discounters and apparel retailers all posted good results. “What I find intriguing and encouraging is it’s not isolated,” Mr. Riley said, “but it’s across the industry.”

Stores for those on a budget continued to shine, like Costco, with a 7 percent increase, and the Nordstrom Rack division of Nordstrom, which posted its highest same-store sales increase of the year. The Rack’s same-store sales rose 10.5 percent, while Nordstrom over all posted a 9.8 percent increase.

Kohl’s, which had been struggling to meet analysts’ sales expectations this year, surpassed them on Thursday, with sales increasing 3.3 percent, versus analysts’ estimates of a 1.1 percent gain. The company said sales of children’s merchandise were stronger than everything else.

Macy’s also exceeded analysts’ expectations, with a 4.1 percent increase versus the 3.1 percent analysts had projected. The company raised its same-store sales guidance for the second half of this year to about 4 percent, up from 3.7 percent, despite the storm’s impact. Macy’s noted that about 200 Macy’s and Bloomingdale’s stores had to close anywhere from a few hours to multiple days as a result of the storm, but added that “the company is confident that it can make up some or most of the lost sales through the remainder of the quarter.”

Target had a rare miss, with a 2.4 percent increase versus the 3.2 percent analysts had expected. The company did not give a clear reason for the results, saying in a release that they were “near the low end of our expected range.”

The biggest decline came from the teenage-apparel retailer Wet Seal, which was troubled by management churn and sliding sales. Same-store sales declined 7.6 percent, which was actually less steep than the 10.5 percent drop that analysts had expected.

Same-store sales at Rite Aid dropped 1.1 percent, largely because customers chose cheaper generic prescriptions over name-brand ones. (Walgreens, the other drugstore chain reporting monthly same-store sales, will do so next week.)

Retail analysts were already looking ahead to the storm’s effect on November sales. A Citi analyst, Deborah Weinswig, wrote in a research note that discounters could see a slight lift as people restocked supplies after the storm. But department stores that depend on New York City will be hit, she said — she estimated that Saks derives 22 percent of sales from its Manhattan flagship, and Macy’s gets 8 percent of sales from its New York City-area stores. Ms. Weinswig wrote that “the cost of cleanup and repairs from the hurricane could take money away from holiday purchases, which puts early holiday sales at risk.”

But Mr. Riley, the retail consultant, said the storm had arrived early enough to give people plenty of time to shop for holiday items. “It’s a timing issue, as opposed to ‘It’s going to affect the holiday season,’ ” he said.

Article source: http://www.nytimes.com/2012/11/02/business/economy/retailers-report-an-upbeat-october.html?partner=rss&emc=rss