KSS 47.25 same store sales falling at the bottom of the heap. That says it all. WS analysts have yet to point out this minor problem that regularly clouds their reports. This will go down hard. TGT had a 9.4% increase.
Associated Press
Many Retailers Report Solid January Sales
Thursday February 3, 5:16 pm ET
By Anne D'Innocenzio, AP Business Writer
Many Retailers Report Solid Sales in January Despite Snowstorms in Midwest, Northeast
NEW YORK (AP) -- Consumers lured by clearance sales and a fresh assortment of spring clothes gave many of the nation's retailers solid sales in January and hopes for even stronger business in the months ahead. Late-month snowstorms in the Midwest and Northeast depressed results for some merchants, but didn't hurt the industry's overall performance.
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As merchants released their results Thursday, a diverse group of retailers had sales that beat Wall Street expectations, including clothing stores Abercrombie & Fitch and Talbots Inc., department store chain J.C. Penney Co. Inc. and discounter Target Corp. Luxury stores such as Neiman Marcus Group Inc. again reported sales that surpassed Wall Street estimates.
The month provided some encouraging trends -- stores including Penney and Talbots had strong sales of regular-priced spring merchandise, a sign that consumers are more upbeat about spending.
"Solid sales of spring goods this early in the season indicate that consumers are feeling better," said Ken Perkins, an analyst at RetailMetrics LLC, a research firm in Swampscott, Mass. "It also bodes well for the bottom line."
Perkins predicted fourth-quarter earnings will be healthy although nervous retailers resorted to heavy markdowns as shoppers procrastinated during December. "The heavy discounting that took place doesn't seem to have taken a big bite out of the bottom line as one might have expected," he said. "Profits won't be stellar, but they will be OK."
There were some disappointments during January, including an overall sales decline at Gap Inc. and a drop at May Department Stores Co. But generally, it was a good month.
The International Council of Shopping Centers-UBS sales tally of 72 retailers rose 3.6 percent in January, higher than the 2.5 percent forecast. The tally is based on same-store sales, which are sales at stores opened at least a year, considered the best indicator of a retailer's health.
Analysts were worried about January's results because of the severe weather at the end of the month, but as Michael P. Niemira, chief economist at the International Council of Shopping Centers, said, "stores are holding up." January is the final and least important month in the retail sales calendar, but nonetheless is an indicator of consumer spending.
Still, despite January's overall good performance, stores do have challenges in the next few months, including interest rates that have crept upward and that can curtail spending. Consumers are also paying higher prices for fuel.
"There is no reason that this is going to be a bad time, but we are not going to see the fairly significant growth we saw" in the early part of last year, said Tracy Mullin, CEO of the National Retail Federation, which predicts that total sales will rise 3.5 percent this year. That's well short of the 6.7 percent growth in 2004.
Meanwhile, the Labor Department said the number of newly laid off workers filing claims for unemployment benefits totaled a seasonally adjusted 316,000 last week, a decline of 9,000 from the previous week, boosting new claims to the lowest level since early December.
Wal-Mart Stores Inc., the world's largest retailer, reported a 2.5 percent increase in same-store sales, compared to a 2.6 percent estimate by analysts polled by Thomson First Call.
The discounter's original forecast was for a 2 percent to 4 percent gain, but on Monday Wal-Mart estimated that same-store sales would be up 2.5 percent, hurt by the snowy weather in the Northeast and Midwest.
Wal-Mart and other retailers said business was also affected by the timing of the Super Bowl, which is being held Feb. 6 after being played in January of last year. That means sales of party items and snack foods will fall in February this year.
Rival Target had a 9.4 percent gain in same-store sales, above the 6.6 percent estimate.
BJ's Wholesale Club Inc. posted a 1.9 percent gain, below the 6.4 percent forecast. More than half the chain was affected by snowstorms.
Penney's department store sales rose 3.3 percent, much better than the 2.7 percent decline Wall Street expected. Penney, which raised its fourth-quarter earnings projections, said its performance was helped by strong sales of holiday clearance merchandise and spring apparel.
Sears, Roebuck and Co. reported a 0.8 percent gain in its domestic business, better than the 2.6 percent decline Wall Street expected.
But May suffered a 7 percent drop, much worse than the 2.8 percent Wall Street expected.
Federated Department Stores Inc. had a 0.4 percent same-store sales drop, worse than the 0.2 percent estimate.
Upscale stores, whose customers continue to benefit from an improving economy, once again had strong sales. Neiman Marcus reported a 12.2 percent gain in same-store sales, above the 7.9 percent estimate.
Among mall-based apparel retailers, Limited Brands Inc.'s same-store sales rose 9 percent, above the 6.5 percent estimate. Talbots had a 13.4 percent increase in same-store sales, well past the 6.5 percent forecast.
"January is historically a clearance month and our significantly better-than-expected comparable store sales results ... were driven primarily by the strength of our markdown selling," said Arnold B. Zetcher, chairman, president and chief executive, in a statement. He also reported a healthy increase in regular-price selling of early spring merchandise.
Gap's same-store sales fell 7 percent, worse than the 0.5 percent estimated.
Abercrombie & Fitch enjoyed a 17 percent same-store sales increase, well above the 1.4 percent estimate. |
