DOW JONES NEWSWIRES
Retailers generally reported December same-store sales above
Wall Street's modest growth expectations, leading numerous
companies to boost forecasts.
Analysts were expecting increases to some retailers' fiscal
fourth-quarter targets. Promotions during this holiday season were
more surgical and inventory planning more rational than the
panicked discount pricing that set in last year. As a result,
margins and profitability have been expected to benefit even if
traffic and purchases could have been more robust.
Those boosting views ranged the gamut from Limited Brands Inc.
(LTD) to Macy's Inc. (M) to American Eagle Outfitters Inc.
(AEO).
Unusually cold weather and big snowstorms along the East Coast
were a curveball, but stores seemed to compensate for any lost
traffic from weather with online sales and strong business in the
post-Christmas week. Macy's online sales were up 29%, for
example.
Retailers sales comparisons started to ease in September and
increased the likelihood of year-over-year gains, after stores
suffered for more than a year as consumers cut spending. This
December's results follow last year's 3.6% drop, excluding Wal-Mart
Stores Inc. (WMT), according to Thomson Reuters. Wal-Mart stopped
issuing monthly sales figures in May.
A modest 2% increase was seen for this December overall, with
discounters' continued sales strength expected to outperform others
and the apparel group performing second best thanks to easy
comparisons to last year's rough results. But even more declines
were expected in teen/child retailers.
Other discounters reported solid results for December. BJ's
Wholesale Club Inc. (BJ) posted a 2.7% increase excluding gasoline
sales, and the company said the growth would have been double that
absent the mid-December snowstorm that socked the East. Larger
rival Costco Wholesale Corp. (COST) had a 2% rise in the U.S. minus
gasoline. Unadjusted global same-store sales rose 9%, topping
expectations.
Teen and child retailers were performing well, with the
exception of Abercrombie & Fitch Co. (ANF). Analysts had
worries that the company's eagerness to discount this year--after
keeping up an institutional bias to avoid promotions well into the
recession--would hurt the retailer. Its same store sales dropped a
worse-than-seen 19%, compared with 24% drop the previous year.
But on the other hand Buckle Inc.'s (BKE) 6.6% increase beat
expectations in spite of a difficult comparison to the prior-year
period, when it had double-digit sales growth. The company has been
posting revenue and comparable sales increase throughout the
recession.
Elsewhere, Sears Holdings Corp. (SHLD) set its fiscal
fourth-quarter earnings estimate well above analysts' expectations,
as it reported same-store sales growth last month thanks to
strength at Kmart. Sears is up 13% premarket at $100.70.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com