Wal-Mart Cuts Outlook Amid December Retail Gloom
New York City Sales at the nation’s retail chains declined in December nearly across the board. Even top-performing Wal-Mart Stores Inc. posted a smaller gain than what Wall Street expected and cut its fourth-quarter-earnings outlook.
Wal-Mart, blaming the weak economy and severe winter conditions, said that same-store sales rose 1.2%. Excluding the impact of declining gasoline prices at the pump, the gain was 1.7%.
Wal-Mart noted that health-and-wellness items were the categories that primarily fueled sales. Electronics sales were solid, while the apparel and jewelry business was weak.
Target Corp. on Thursday said its same-store sales fell 4.1% in December, but the result was better than the 9.1% drop Wall Street analysts predicted. The retailer said the results reflected stronger sales in the last two weeks of the month.
Target president and CEO Gregg Steinhafel said the company reduced prices during the month to gain market share. The markdowns, combined with additions to the company's accounts receivable allowance, will reduce profitability in the fourth quarter.
Target said overall sales in December rose 0.2% to $9.28 billion from $9.26 billion in Dec. 2007.
Many retailers reported steep declines, including Saks, Sears and Williams-Sonoma.
Saks said its December same-store sales fell 19.8%. Analysts, on average, had expected the same-store sales to fall 10%. Total sales for the five weeks ended Jan. 3 fell 18.9% to $363 million.
Sears Holdings said its December same-store sales dropped 7.3%, weighed down by a 12.8% drop at domestic Sears stores. Kmart same-store sales fell 1.1%.
In other results:
- Williams-Sonoma Inc., which didn't break out December figures, said its same-store sales dropped more than 24% for the eight-week period ended Dec. 28, 2008 and warned its fourth-quarter profit will likely come in at the low end of expectations.
- Nordstrom Inc. said its same-store sales for December dropped 10.6% — beating Wall Street's expectations of a steeper decline — and higher-than-expected markdowns forced the luxury retailer to lower its earnings forecast. The company said total sales fell 8% to $1.13 billion for the five-week period ended Jan. 3 from $1.22 billion in the prior year, based on preliminary results. For the year-to-date period, same-store sales fell 8.9% compared to the year-ago period.
- Dillard's Inc.’s same-store sales fell 5% in December, hurt by lower sales of children's clothes and furniture. The results beat analysts’ projections.