New York City With few exceptions, the nation's retailers got off to a poor start in 2008, with many leading merchants, including Wal-Mart Stores Inc., reporting January results that were even worse than already grim Wall Street forecasts.
The disappointing sales figures made it clear that consumers wrestling with high gas and food prices, a slumping housing market, an escalating credit crisis and a weakening job market are still retrenching, buying mostly necessities. The disappointments cut across all sectors, from apparel specialty stores to discount retailers.
Among the few winners were warehouse club operators Costco Wholesale Corp. and BJ’s Wholesale Club. Costco, whose results beat Wall Street expectations, reported a 7% gain in same-store sales, surpassing the 6.6% estimate. BJ's said its January same-store sales rose 7.8%, ahead of analyst expectations, helped by sales of gas and food.
Upscale retailer Saks Inc. also reported a strong month as same-store sales rose 4.1% on strong demand for jewelry, women's designer apparel and eveningwear, men's accessories and shoes, and cosmetics.
Another bright spot included The Buckle Inc., whose January same-store sales rose 19.1%.
However, Limited Brands reported an 8% drop in same-store sales in January, worse than the 6.9% forecast. And Pacific Sunwear suffered a 7.4% drop in same-store sales; analysts expected a 1.2% rise.
Wet Seal Inc.'s January same-store sales fell 5.7% as its Arden B chain continued to slump. The results were worse than the 1.5% decline expected by analysts.
Gap Inc. reported same-store sales fell 2% in January. Same-store sales rose 5% at Banana Republic, fell 4% at Gap's namesake stores, fell 3% at Old Navy and fell 5% internationally.
Abercrombie & Fitch Co.'s January same-stores sales were flat as higher sales at its namesake chain offset declines at the Hollister and Ruehl stores. The result was in line with expectations on Wall Street.
Abercrombie & Fitch stores had a 2% increase in same-store sales. Hollister reported a 2% decline and Ruehl posted a 17% drop.
Chico's FAS said its same-store sales fell 22.1%, far below analyst estimates, as it aggressively marked down merchandise hurting sales volume and purchase amounts.
The department store and discount sector also turned in a sluggish performance overall. Wal-Mart reported a 0.5% gain in same-store sales, below Wall Street’s estimate of 2%. The company said it continues to do well with staples such as groceries but that home furnishings remain weak.
Meanwhile, Target Corp. said its same-store sales fell 1.1% in the January period, hurt by lower traffic and consumers stocking up on low-margin consumables.
Kohl's Corp. said Thursday same-store sales tumbled 8.3% in January, as the retailer cautioned that customers are being picky about their purchases. Dillard's Inc.’s January same-store sales fell 12%.
J.C. Penney Co. said Thursday that January same-store sales fell 1.9% a much smaller drop than analysts expected, as sales in the Northwest lifted revenue.