NEW YORK, Feb 6 (Reuters) - U.S. retail sales for January
could come in a bit better than expected despite the fact that
retailers tend to underperform during the first month of the
year as they clear excess holiday merchandise from shelves.
Although analysts have said they expect most merchants to
report same-store sales at or above plan, there is no real hope
for great performance from any one retailer since most have
wrestled with one of the worst retail climates seen in years.
Same-store, or comparable, sales are at stores open at
least a year.
"Following what turned out to be a challenging holiday
season, inventory levels at some retailers were a bit higher
than planned," Merrill Lynch retail analyst Mark Friedman, who
follows specialty apparel retailers like Gap Inc. and
Abercrombie & Fitch Co. , said in a research report.
"We did notice some steeper markdowns vs. a year ago,"
Friedman said. "However, we do believe this aggressive pricing
should have helped clear the excess, and leaves most of the
brands in good shape for spring."
To make matters even more difficult, consumer confidence
dropped in January to its lowest level in more than four years.
The Conference Board, a New York-based economic research firm,
said last week its monthly index of consumer confidence slid to
114.5 in January from 128.6 in December, the sharpest one-month
drop since October 1990 when the country was in a recession.
But analysts also said January comparable-store sales will
be stronger than the tough comparisons to Y2K suggest. In late
1999 and early 2000, consumers who feared the end of the world
was near became famous for stockpiling everything from bottled
water to batteries.
"Simply put, the millennium proved to be an abnormally
tough comparison as stockpiling ahead of the original Y2K panic
artificially lifted results," UBS Warburg retail analysts Aram
Rubinson said in a research note.
"To be sure, the issue for retailers was not their ability
to keep the computers running...it was their ability to keep
the registers humming one year later," Rubinson said.
Department stores sales are generally expected to come in
ahead of company forecasts because the retailers were able to
clear racks of winter merchandise, while discount store sales
are seen in line with forecasts, analysts said.
"Sales momentum started very strong in the first week of
the month owing to robust clearance selling, but slowed
mid-month, particularly at the discount stores, many of which
ran slightly below plan in weeks three and four," J.P. Morgan
analyst Shari Schwartzman Eberts, wrote in a research note.
Analysts expect Wal-Mart Stores Inc. , the world's
largest retailer, to report sales gains of about 4 to 6
percent, Kmart Corp. is seen with January sales growth
of 1 to 3 percent and Target Corp. is seen posting
sales gains of 2 to 5 percent.
Federated Department Stores Inc. sales are seen
rising 1 to 3 percent. Earlier this week, May Department Stores
Inc. said its same-store sales rose 3.4 percent in
January. Sears Roebuck & Co. , which had indicated that
sales for the fifth week of the month were running below plan,
is expected to post a 2.0 percent growth in sales.
Specialty apparel retailers also enjoyed a relatively
stable January, and analysts now believe most have adequately
prepared themselves for spring, with some already stocking
stores with new products while others wait for warmer weather.
American Eagle Outfitters Inc. , which has of late
been enjoying top billingamong youth-oriented clothing
retailers, is expected to post a 3 percent gain in same-store
sales, although some analysts think an upside is likely.
Also, Men's Wearhouse Inc. is looking at about a 4
percent rise in same-store sales, while Limited Inc. ,
the operator of Express and Lane Bryant stores, is expected to
report flat same-store sales for the month.
On the downside, Gap is looking at a decline in same-store
sales of between 4 percent to 7 percent as it deals with steep
markdowns across its Gap, Old Navy and Banana Republic brands.
And women's apparel retailer Talbots Inc. , which last
year enjoyed stellar sales growth, is also expected to post
flat to negative 4 percent same-store sales.
Analysts also expect Abercrombie & Fitch to see a 2 to 4
percent decline in same-store sales.
Among consumer electronics retailers, Best Buy Co. Inc.
is looking at a 3 percent to 5 percent rise in sales,
while RadioShack Corp. is expected to post a 7 percent
to 9 percent rise in same-store sales.
(Additional reporting by Anna Driver)
REUTERS
Rtr 15:32 02-07-01 |
