FINANCE

Costco shines in November, Target disappoints

BY Katherine Boccaccio

New York City — The discount and wholesale club sector was hit and miss in November, as Costco shone with a 9% rise in same-store sales for the month, but Target missed Wall Street expectations with a weak gain.

Despite a strong turnout on Black Friday, not all retailers received the expected sales benefits in what was a heavily promotional environment. “The consumer has become insanely focused on promotions," David Bassuk, head of the global retail practice at AlixPartners, told Reuters. "The consumer is willing to spend money, that’s the good news. But consumers need to be convinced."

For Target Corp., which recorded a 1.8% rise in November same-store sales, which missed Wall Street’s predicted 2.7% gain, average ticket was higher in November but overall traffic was down. The biggest merchandise disappointments, according to Target, were toys, music and movies. Strong sellers were food and beauty products. Total sales for the month rose 3% to $6.19 billion, and Target said it expects its December same-store sales to rise in the low- to mid-single digits.

Costco Wholesale Corp. turned in a far better performance in November, reporting a same-store sales rise of 9%, topping the expected 6.5% gain. The strong showing was due in part to higher gasoline prices, the operator said.

In other discount same-store news:

  • Ross Stores rose 5% in November, beating expectations.
  • TJX Cos. meet expectations, with a 4% same-store sales gain in the month.
  • Stein Mart recorded a 4.6% decline, widely missing Wall Street’s expected 0.5% gain.
  • Fred’s was up 1.5%.
  • Duckwall-Alco dipped 0.2%.
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Target comps light in November

BY CSA STAFF

MINNEAPOLIS — Target reported November same-store sales increased 1.8%, which was toward the low end of the company’s guidance that called for an increase in the low to mid single-digit range.

“November sales were near the low end of our expectations for the month as we compared against very strong performance last year,” said Target chairman, president and CEO Gregg Steinhafel. “As we kicked off the holiday season following Thanksgiving, sales were strongest on Black Friday as guests responded to our midnight opening and compelling prices. Our view of December remains the same — we expect a competitive and promotional environment as consumers continue to focus on value.”

This year’s 1.8% increase was on top of November 2010 increase of 5.5% and was led by a mid teens increase in the food category followed by a mid-single digit gain in the household essentials area, which includes the beauty category where performance was the strongest. Apparel and accessories comps were flat, while hardline and home furnishings and decors comps declined in the low single digits. On a regional basis, stores in California performed better than average while stores in the south and southeast were weaker than the average.

Steinhafel said the company expects its December sales performance will surpass November and he called for a comp increase in the low to mid single-digit range.

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FINANCE

Department stores show mixed results in November

BY Katherine Boccaccio

New York City — In a heavy promotional environment starring early sales and steep discounting, the department store players turned in mixed performances in November. Industry-wide retail sales on Black Friday rose 7% to $11.4 billion, the largest amount ever spent, according to ShopperTrak.

Macy’s Inc., helped in part by earlier store openings on Black Friday, reported a same-store sales rise of 4.8% in November, topping the 3.9% gain expected by Wall Street. The department store retailer’s online sales at macys.com and Bloomingdales.com rose a whopping 49.6% in November, and those results are included in Macy’s same-store revenue results.

This was the first year that Macy’s stores opened at midnight on Black Friday, according to Terry Lundgren, president and CEO. Total revenue for the month rose 5.3% to $2.47 billion. Macy’s maintained its fourth-quarter guidance for same-store revenue to climb 4% to 4.5%. But the company said it could exceed that forecast if November’s trends continue.

J.C. Penney Co. said it wished it had opened earlier on Black Friday. The department store retailer’s same-store sales fell 2% in November, saying it was hurt by the decision to open stores at 4 a.m. on Black Friday instead of opening Thanksgiving evening at least by midnight. Analysts expected a decline of 1.6% in the month.

J.C. Penney said that total monthly revenue declined 5.9% to $1.74 billion in November. Online traffic was up 12% for the holiday weekend. J.C. Penney said that sales made on its web site from Black Friday through Cyber Monday will ship in December and be reported with its December sales figures.

In other November same-store results in the department store sector:

  • Nordstrom same-store sales rose 5.6%.
  • Kohl’s widely missed the expected 2% same-store sales rise in November with a 6.2% decline.
  • Saks reported a 9.3% gain in November.
  • Bon-Ton declined 4.9%.
  • Cato declined 5%.
  • Stage Stores same-store sales were up 2.3% in November.
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