DOW JONES NEWSWIRES
Retailers reported another month of lower same-store sales in
January, though the declines in general weren't as bad as feared,
as Wal-Mart Stores Inc. (WMT) rebounded from a weak December with
results above expectations.
But trouble spots remained at some consistent underperformers of
late. Target Corp. (TGT) said its fiscal fourth-quarter earnings
won't meet analysts' expectations because of markdowns and
account-receivables woes. Gap Inc. (GPS) reported a 23% sales
slump, led by a 34% plunge at its long-ailing Old Navy chain.
Wal-Mart until December had been showing it was benefitting from
the slumping sales seen by other retailers as consumers trade down
and do more bargain shopping.
But in January U.S. same-store-sales growth, excluding gasoline,
rose to 2.1% with the namesake chain posting a 2.1% increase and
Sam's Club seeing 2.4% growth. The results edged the high end of
Wal-Mart's forecast last month of flat to 2% growth.
The increase, while not terribly big, is much better than how
retail as a whole has been faring.
While saying its stores "are performing very well," Vice
Chairman Eduardo Castro-Wright noted the just-concluded fiscal
year's same-store-sales growth was triple that of the prior
year.
Wal-Mart also switched from providing monthly sales forecasts to
quarterly ones. For the period started Saturday, the company
anticipates U.S. same-store-sales growth of 1% to 3%.
Wal-Mart shares rose 2% premarket to $47.35.
Same-store sales as a whole fell for the fourth-straight month
in January. Predictions going in were the worst this decade, with
sales excluding Wal-Mart projected to drop nearly 6%. The ratio of
those missing and beating expectations was nearly equal, according
to Thomson Reuters, while the outperformers exceeded views more
than the laggards.
Retail's troubles reflect the continued deterioration of
consumer confidence, which has crashed to record lows of late. That
is proven not just by surveys but the biggest drop for consumer
spending in decades, and even deep discounts that attracted
shoppers as the month began lost their effectiveness as January
progressed.
Apparel and department-store chains have been weak performers
for some time and that continued in January. Department stores in
general reported declines worse than expected, with many posting
double-digit drops.
On the apparel side, discounter TJX Cos. (TJX) reported a 4%
drop as it projected earnings at the high end of its lowered view,
while teen chain Aeropostale Inc. (ARO) posted a much
bigger-than-expected 11% jump and boosted its profit view.
Struggling Limited Brands Inc. (LTD) reported a 9% drop. The
parent of Victoria's Secret and Bath & Body Works last month
projected a mid- to high-teens drop on a percentage basis for
January as it slashed its fiscal fourth-quarter earnings forecast.
Its shares climbed 5.9% premarket to $8.32.
And high-flier Buckle Inc. (BKE) again remained far above its
peers, reporting a 15% increase which was well above analysts'
expectations. The teen-apparel company has posted double-digit
growth in same-store sales for 18 straight months.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com