=DJ 2nd UPDATE: US Retailers Report Mixed Nov. Retail Sales
11/30/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
(adds comment from Perkins, additional company comments)
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
NEW YORK (Dow Jones)--Retailers began posting mixed November same-store sales, but many said slow sales in the beginning of the month picked up during the Black Friday weekend, positioning them for a good holiday sales season.
Strength at department stores and teen/child sectors were offsetting weakness at Wal-Mart Stores Inc. (WMT). According to Thomson Financial, based on 44 merchants that have reported so far, 26 retailers had results that missed expectations, 16 beat estimates and two met forecasts.
Last year, major retail chains reported a 3.3% gain in same-store sales, or sales at stores open at least a year, as spending was lifted by soaring home values. But while the housing market has grown shaky over the past year, the job market and wages lately have been strong.
Wal-Mart confirmed a 0.1% decline in its November same-store sales - short of its earlier forecast for flat same-store sales in November. That would mark Wal-Mart's first same-store sales decline in more than a decade. The company said it expects sales to be flat to up 1% in December.
"This is pretty discouraging," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. But he added that Wal-Mart's weak sales won't be a harbinger of a broad based weakness across the retail sector.
Wal-Mart recently has missed its monthly sales forecasts despite a late-summer drop in gasoline prices that should have benefited its lower-income consumers. The company blames a botched fashion strategy, remodeling efforts that have disrupted traffic and difficult comparisons with a year ago, when shoppers in the Southeast scrambled to stock up on essentials in the wake of big hurricanes.
Wal-Mart rival Target Corp. (TGT) said sales rose 5.9%, topping a 5.7% estimate from Thomson First Call. At Costco Wholesale Corp. (COST), same-store sales were 5% higher, missing the 5.8% average increase expected by analysts reporting to First Call.
J.C. Penney Co. (JCP) and Federated Department Stores Inc. (FD), which both sounded upbeat notes on post-Thanksgiving sales, reported 1.4% and 8.5% jumps in same-store sales, respectively. Federated topped First Call expectations of a 4.8% jump after more than 400 former May Co. stores were converted to Macy's in September. Analysts surveyed by First Call, on average, were expecting an increase of 3.7% for J.C. Penney.
Kohl's Corp.'s (KSS) same-store sales for the four-week period ended Nov. 25 rose 3.7%. On average, analysts polled by First Call expected same-store sales to increase 4.8%.
November's post-Thanksgiving weekend traditionally kicks off the Christmas shopping season. Reports were mixed on how strong a start retailers got. Sales on "Black Friday" rose 6% to $8.96 billion, according to ShopperTrak RCT, a firm that compiles data based on traffic at 45,000 stores in shopping malls around the country. But that information excludes data from many strip centers and free-standing stores, such as Wal-Mart, Prudential Equity Group's Stacy Pak said in a Monday research note.
Warmer-than-usual temperatures in November haven't helped apparel sales, according to weather consultant Planalytics. And while sales of electronics were above average at Wal-Mart, Best Buy Co. (BBY) and Circuit City Stores Inc. (CC) during the Black Friday weekend, gains in apparel were below average, according to credit card transaction data from Visa USA. Department stores will depend on last-minute splurging on cashmere sweaters, coats and leggings to meet outsized expectations for the season, according to Wayne Best, Visa USA's chief economist.
Ann Taylor Stores Corp. (ANN) said Thursday that its November sales at stores open at least one year fell 4.3%. Analysts, on average, had expected the women's clothing retailer to post a same-store-sales drop of 2.3%, according to First Call.
"As expected, the unusually warm weather in much of the country negatively impacted results in weather-sensitive categories such as sweaters, outerwear and cold weather accessories at both Ann Taylor and Loft," said Kay Krill, president and chief executive of Ann Taylor.
Gap Inc. (GPS), which has struggled to attract consumers to its latest fashions, said November same-store sales fell 8%, a larger drop than the 5.4% decline projected in a survey of analysts by First Call. Abercrombie & Fitch Co. (ANF) said sales at stores open at least one year fell 3%. Analysts, on average, had expected the company to post a same-store-sales gain of 3%, according to First Call.
Teen retailers generally did well. Wet Seal Inc. (WTSLA) had a 5.5% same-store gain, beating the 4% estimate. But Bebe Stores Inc.'s (BEBE) 5.8% gain fell below the 7.9% estimate from Wall Street.
Teen retailer Aeropostale Inc. (ARO) said same-store sales rose 1% for the four weeks ended Nov. 25. Rival American Eagle Outfitters Inc. (AEOS) said its same-store sales rose 14% for the month ended Nov. 25.
Among the most disappointing results were same-store sales from Pier 1 Imports Inc. (PIR), which tumbled 15.3% compared with the 13.6% decline expected by Wall Street.
For continuously updated news from the Wall Street Journal, see WSJ.com at wsj.com.
(END) Dow Jones Newswires
11-30-06 0910ET |
