J.C. Penney names CFO
Dallas — J. C. Penney Co. has named Michael Dastugue as executive VP and CFO. He served most recently as senior VP finance, and was responsible for directing the financial strategies of all J.C. Penney business units.
Dastugue succeeds Robert Cavanaugh, who will serve as an adviser to chairman and CEO Myron Ullman until his retirement in January 2012.
ShopperTrak: Holiday sales up 4%
Chicago — Year-over-year retail sales rose a solid 4% for the 2010 holiday shopping season (November/December), according to ShopperTrak’s National Retail Sales Estimate.
Conversely, total U.S. foot traffic fell slightly below expectations as consumers continued the pattern retailers saw throughout 2010 of fewer mall and individual store visits with a larger spend. ShopperTrak’s revised holiday forecast called for a 1.8% traffic increase.
With very early holiday sales and promotions, November started off with a bang as retail sales for the first two weeks of the month (through Nov. 13) increased 6.1% versus last year, while total U.S. foot traffic increased a robust 6.2%. In all, November sales and traffic increased 5.8% and 4.6% respectively. By comparison, sales and traffic during November 2009 versus 2008 decreased 1.9% and 6.1%.
In December, retailers felt the wrath of Mother Nature as the crippling blizzard along the Eastern seaboard essentially wiped out shopping and delayed nearly $1 billion in sales on Dec. 26 and Dec. 27. ShopperTrak’s data shows overall monthly sales increased 2.6% compared with last year, while traffic declined 2.6%. In early December, ShopperTrak anticipated 2.2% and 0.2% sales and traffic increases for the month.
“Although early November door buster sales and promotions had been planned months in advance, the dramatic response, which quite possibly saved the season, was a very welcome surprise,” said Bill Martin, co-founder of ShopperTrak. “Then just as retailers were beginning to shake off sluggish returns from early December, the blizzard in the East and Northeast essentially wiped out traffic and sales in the days immediately following Christmas, strongly impacting overall monthly performance.”
Martin continued: “Although we’re still essentially comparing to depressed levels, the four percent sales rise this season is the first real positivity in two years and should be seen as a relatively encouraging sign for retailers heading into 2011.”
The NRSE provides a nationwide benchmark of retail sales. It is derived from the U.S. Commerce Department’s GAFO (general merchandise, apparel, furniture, sporting goods, electronics, hobby, books and other related store sales) statistic, as well as ShopperTrak proprietary industry intelligence on shopper movement and sales statistics.
The ShopperTrak Retail Traffic Index measures traffic across five separate retail segments including total U.S. retailing. Available as a database or in newsletter format, SRTI reports national and regional traffic trends in a rolling 16 month trend line.
Correction: sales did not exceed expectations
It seemed like everything was going Target’s way after the company reported a 5.5% same-store sales increase during November, but then the revelation came last week of a 0.9% December comp increase and the wind came out of the company’s sales.
The weakness was surprising as expectations had grown lofty. Target News Now was among those guilty of being overly optimistic, and several days prior to the release of December results commented, “with Target set to release December sales results this Thursday the issue isn’t whether the company’s results will be in line with expectations but the degree by which they are likely to exceed same-store sales guidance in the low to mid single-digit range.”
Oops. Nothing could have been further from the truth, as the 0.9% gain was below the company’s guidance and well off analysts’ consensus estimate of 4%. So what went wrong? Turns out Target, like a lot of other retailers, was simply too effective with its promotional efforts in November and essentially pulled demand forward that might otherwise have translated into December sales. Poor weather late in the month hurt post Christmas sales in the Northeast, but it was December and snow happens.
The sales shortfall did not sit well with investors, and Target’s stock price got pummeled after enjoying a nice run late last year. Shares had risen to slightly more than $60 in the first days after the New Year, but the release of December sales caused shares to drop by $4.01 to close Jan. 6 at $54.93 from the prior day’s close of $58.94.
What make the company’s December showing especially disappointing is that comparisons against the prior year were relatively easy. In December 2009, comps increased just 1.8% and that amount had to be regarded as fairly modest given the easy comparison against the prior two years. Same-store sales in December 2008 declined 4.1% and in December 2007 they declined 5%.