FINANCE

Discount results a mixed bag as Target, Costco fall short and TJX outperforms

BY CSA STAFF

New York City — Discounters reported mixed results for December sales, with many, including Target Corp. and Costco Wholesale Corp., posting gains that fell below analysts’ expectations.

Target Corp. said its same-store sales edged up 0.9%, well short of analyst expectations for a 4% increase. The chain said weaknesses in electronics, toys and some home categories offset strength in grocery and apparel items.

“December sales were below expectations, as strength in grocery and apparel was offset by softness in electronics, toys and some home categories,” said Gregg Steinhafel, chairman, president and CEO of Target Corp. “Sales in some key gift-giving categories moved earlier into the holiday season, and lower margin items drove a higher portion of sales than expected.”

Based on Target’s quarter-to-date sales results and January outlook, the company said it continues to expect fourth quarter same-store sales will increase in the range of 2% to 4%.

Costco Wholesale Corp.’s same-store sales climbed 6% in December, but missed the 6.2% gain that Thomson Reuters predicted.

The TJX Cos. had a better showing in December, with a same-store sales gain of 2%. Wall Street expected a drop of 2.5%. Total sales rose 6% to $3 billion.

"I am extremely pleased with December’s sales results, as we significantly exceeded our plans during this important period," TJX CEO Carol Meyrowitz, CEO, TJX.

In other December same-store sales results:

  • Ross Stores same-store sales climbed 4%;
  • SteinMart same-store sales dipped 1.9%, and total sales dropped 2.3% to $166.3 million;
  • Fred’s same-store edged up 0.2%; and
  • At Duckwall-Alco Stores, sales rose 1.1%.
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FINANCE

Macy’s and Kohl’s miss mark in December; Nordstrom shines

BY CSA STAFF

New York City — On the heels of a strong November, some department store retailers reported surprisingly weak December revenue. Results were impacted by a blizzard in the Northeast, which took a bite out of sales after Christmas.

The results raised some worries that the holiday season might be less stellar than some had hoped. Still, much of Wall Street still predicts that November and December spending will show the largest annual increase since 2006.

"It’s not shaping up to be a blowout holiday for retailers. It’s slow and steady," said Ken Perkins, president of RetailMetrics.

Macy’s missed the Wall Street mark with a same-store sales gain of 3.9%. Analysts expected a same-store sales rise of 4.5%. But the combined November and December figure rose 4.6% and the retailer is maintaining its profit outlook for the fourth quarter.

“Sales in December were strong at both Macy’s and Bloomingdale’s, consistent with our high expectations, despite snowstorms that disrupted after-Christmas shopping along the East Coast,” said Terry J. Lundgren, chairman, president and CEO of Macy’s.

Kohl’s Corp. also fell short of expectations. The company’s same-store sales rose 3.9% in December, compared with the 4.3% increase analysts expected. For the five weeks ended Jan. 1, Kohl’s said total revenue climbed 5.9% to $3.19 billion. Online revenue surged 66%.

At J.C. Penney, same-store sales rose a better-than-expected 3.7% surpassing Wall Street’s expected 3.3% gain. It was the chain’s best holiday sales gains since 2006. Total December sales increased 2.3% to $2.96 billion, with the chain’s off-mall and newer stores, including its Manhattan location, outperforming the company average.

Higher-end retailers turned in strong results as affluent consumers returned to spending. Both Saks and Nordstrom outpaced estimates. Nordstrom reported an 8.4% increase in December same-store sales, while, Saks said same-store sales rose 11.8%.

J.C. Penney same-store sales rose 3.7% surpassing Wall Street’s expected 3.3% gain.

Other department store same-store sales results include:

  • Dillard’s same-store sales rose 7%.
  • Bon-Ton same-store sales edged up 0.1%, citing severe snowstorms for its weak performance.
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FINANCE

Many retailers fall a bit short in December; Limited and Abercrombie shine in specialty sector

BY CSA STAFF

New York City — After coming off a strong November, U.S. retailers found their momentum largely waned in December, with sales impacted by a still-cautious consumer, early discounting and a blizzard that crippled the Northeast in the days immediately after Christmas. But while many chains missed Wall Street’s heightened expectations for December, the retail industry still turned in its strongest holiday performance since 2006.

The International Council of Shopping Centers said its index of December same-store sales rose 3.1% versus a year ago, short of the 3.5% rise expected by analysts.

The overall season was good, but the strength came from the beginning of the season," said Michael P. Niemira, chief economist, ICSC, in an Associated Press report. "This is kind of a wake-up call. It’s back to reality."

Thomson Reuters, which tracks same-store sales for a group of 28 national chains, said total sales for the group were expected to post a 3.4% increase in same-store sales for December, following a 5.6% bump in November.

Still, if retailers hit the 3.4% mark, it would be the best showing since December 2006, when same-store sales rose 4.7%.

Strong online sales, which many retailers don’t include in their monthly figures, also brightened the holiday spending picture as well. Consumers spent 13% more online this holiday season, ringing up a record $30.81 billion in spending, according to comScore.

On the apparel front, Limited reported a 5% rise in same-store sales, beating analysts’ expectations of a 4.6% gain, and Buckle, which recorded a 6.1% same-store sales gain, when a 4.5% gain was expected. Abercrombie & Fitch’s same-store sales soared 15%.

Among those that didn’t fare well in December was Gap, whose same-store sales dropped 3%, missing Wall Street expectations for a 2.6% gain. Net sales were flat at $2 billion.

By division, same-store sales at Gap North America stores fell 8%. At Old Navy North America stores the figure was down 2% International results declined 4%. The one bright spot was Banana Republic North America, where same-store sales edged up 1% in December.

American Eagle saw same-store sales plummet 11% and total sales fell 6%. Analysts expected a same-store sales decline of 1.7%.

In other apparel same-store results for December:

  • Aeropostale same-store sales slid 5%.
  • Urban Outfitters same-store sales were flat.
  • Zumiez same-store sales rose 9.2%, but missed Wall Street expectations of an 11.5% gain.
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