Discounters and department stores turn in mixed results for December
New York City — The nation’s discounters and department store retailers turned in mixed results for December, with many chains citing unseasonably warm weather that sapped demand for cold-weather merchandise.
“Cold-weather categories, which are highly profitable and represent approximately 25% of our business in December, were down mid-teens on a percentage basis,” said Tony Buccina, vice chairman, president – merchandising, The Bon-Ton Stores, whose December same-store sales fell 0.7%. The company widened its loss forecast.
In the department store and discount store sector, Costco Wholesale Club, Target Corp., and Kohl’s Corp. were among the chains that missed expectations, while Macy’s Inc. Nordstrom and TJX Cos. all did better than was expected.
At Macy’s, same-store sales rose 6.2%. The company is raising its earnings outlook for the fourth quarter and full year due to a strong holiday season and will double its quarterly dividend to 20 cents a share. Macy’s is also increasing its share repurchase program by $1 billion.
Nordstrom said its same-store sales jumped 8.7% for the five weeks ended Dec. 31, easily topping Wall Street predictions for a 5.1% increase.
The company said the strongest regions were the South and Midwest, and that sales were particularly strong during the first week of the period, and the last two weeks of the period.
Meanwhile, The TJX Cos. announced a two-for-one stock split on the heels of a better-than-expected 8% increase in same-store sales for December. The chain noted that it made a strategic decision to clear cold weather apparel in the unseasonably warm winter.
“We enter January with very lean inventories and the flexibility to ship fresh merchandise with great values to our stores. As we look further out into next year, we believe we are very well positioned to continue to post strong sales and margins,” said Carol Meyrowitz, CEO, The TJX Cos.
Kohl’s said its December same-store sales fell 0.1%, missing the estimate for an increase of 2.2%. The chain said it would miss Wall Street’s fourth-quarter profit projection because of weak holiday sales.
J.C. Penney Co. reported that its December same-store sales grew 0.3%, while total sales for the month fell 2.3%. Analysts had expected the chain’s same-store sales to fall 0.1% in December. J.C. Penney said it would report a fourth-quarter loss of 30 cents to 45 cents a share. The company said the loss would include 50 cents to 55 cents a share in restructuring and management transition charges.
For the month, children’s apparel and women’s accessories were the top performing merchandise divisions. While overall sales and traffic were softer than anticipated, J.C. Penney said better trends in its stores during the week leading up to Christmas and increases in traffic and orders on jcp.com during the key holiday shopping periods of the week after Thanksgiving and the week before Christmas.
Costco’s same-store sales rose 7% in December, below analysts’ projections for a 7.6% increase. The same-store sales reflected increases of 7% in the United States and 9% internationally.
In other December same-store sales results:
- Ross Stores reported a 9% increase, easily beating the 4.2% expected by analysts and coming on top of growth in the previous two years. The retailer raised its fourth-quarter earnings guidance.
- Saks Inc.’s sales were up 5.8%, matching analyst expectations. Top categories at Saks included clothing, handbags, women’s shoes, jewelry, men’s accessories and perfume.
- Duckwall-Alco Stores’ sales slipped 0.3%.
Costco CEO earns accolades
CHICAGO — Investment research firm Morningstar has named the outgoing CEO of Costco Wholesale as its 2011 CEO of the Year, the company said Wednesday.
Costco CEO Jim Sinegal, who retired on New Year’s Day, received the recognition for what Morningstar called his "exemplary corporate stewardship, independent thinking" and creating "lasting value for shareholders."
"This year’s nominees have each added intrinsic value to the companies they run," Morningstar chief equities strategist and editor Paul Larson said. "James Sinegal, who has served as CEO since co-founding Costco in 1983, has created and maintained value for all company stakeholders during his tenure."
The retailer announced Sinegal’s plan to step down in September, with COO Craig Jelinek replacing him.
Macy’s to focus on key markets in 2012
NEW YORK — Macy’s Inc. announced a strategic plan on Wednesday to open new stores in select markets as well as to close a series of underperforming units. As part of the plan, five Macy’s department stores will be shuttered in spring 2012 – in Topeka, Kan.; Laurel, Md.; Parma, Ohio; Antioch, Tenn.; and Texas City, Texas. Five new Macy’s stores will open in 2012 and 2013.
“We continue to be committed to maintaining a healthy portfolio of stores that allows us to focus on growth from our best and most productive locations,” said Terry J. Lundgren, Macy’s chairman, president and CEO. “This requires us to make some difficult decisions to close stores that no longer meet our performance requirements, as well as to open stores where we see opportunity.”
The company said that Bloomingdale’s will close four stores in early spring 2012: at Perimeter Mall in Atlanta; in Oak Brook, Ill.; in North Bethesda, Md.; and at Mall of America in Bloomington, Minn.
As previously announced, a new Bloomingdale’s will open in Glendale Galleria in Glendale, Calif., as well as in Stanford Shopping Center in Palo Alto, Calif., which is slated to open spring 2014.
The new Stanford Shopping Center store will be built in a smaller format similar to Bloomingdale’s stores opened in recent years in SoHo (New York), Chevy Chase, Md., and Santa Monica, Calif.
Five new Bloomingdale’s Outlet stores will open in 2012, each with about 25,000 sq. ft.