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NEWS: Merchants See Respectable Holiday Season


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#1 bigjimslade  OFFLINE  

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Posted Jan 5, 2006 - 8:13 am

NEW YORK - Retailers faced an uncertain 2006 Thursday after December sales figures showed that the holiday shopping season, while overall respectable, was disappointing for some of nation's most prominent merchants. As expected, Wal-Mart Stores Inc. was one of the stragglers, falling short of Wall Street's expectations and warning about its fourth-quarter profits. As stores reported their monthly results, the winners included Target Corp., Costco Wholesale Corp., Nordstrom Inc., and teen retailers such as Abercrombie & Fitch Co. Gap Inc. and Sears Holdings Corp. were among the other disappointments. "This is not a great showing, but not a poor showing. It is somewhere in between," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "Consumers are not splurging everywhere. It is a little here and there. The consumer is very selective." Niemira noted that retailers will face a tougher environment over the next couple of months as higher heating bills and rising interest rates are expected to curb consumer spending. "The consumer is unlikely to be a strong consumer," he said. One potential bright spot is a steadily improving job market, whose gradual recovery helped boost consumer confidence last month. The Labor Department reported Thursday that the number of newly laid-off workers filing claims for unemployment benefits fell to the lowest level in more than five years last week. That provided more data that the labor market is rebounding from the effects of a string of devastating hurricanes. "As long as people can find the right merchandise, have a job and borrow a little bit, they are going to go shopping," said Richard Hastings, an analyst at Bernard Sands LLC, who was more positive about consumer spending. "Overall, the holiday season was good. Retailers who had it all nailed down were the winners." The UBS-International Council of Shopping Centers preliminary sales tally of 65 retailers posted a modest 3.2 percent sales gain, at the mid-point of the 3 percent to 3.5 percent growth forecast for the month. The tally is based on same-store sales or sales at stores opened at least a year and are considered the best indicator of a retailer's health. That means that November-December sales will be up 3.5 percent, which is at the high end of Niemira's forecast, but a bit below the pace in consumer spending from the January through October period. After an uneven start to the holiday season, many retailers struggled in December as shoppers appeared to prolong their buying even later than in the past. The exceptions were those selling hot consumer electronics items like Microsoft Corp.'s Xbox 360, digital cameras and digital music players, all of which were snapped up by shoppers early in the season. There were a number of factors that created more angst for merchants. They included Hanukkah falling particularly late this year, on Dec. 25, and the New York City transit strike, which occurred in the critical final days before Christmas, hurting retailers in Manhattan. Gift card sales also pushed December business into January or even later; gift card sales are only recorded when they are redeemed. Wal-Mart, which was more aggressive with its discounting and marketing efforts this year than last year, still disappointed, posting a slim 2.2 percent gain in same-store sales. The results, which were the weakest December performance since 2000, missed the 2.4 percent estimate from analysts surveyed by Thomson Financial. Total sales rose 6.3 percent. Wal-Mart also said its fourth-quarter profits would come in at the low end of expectations. Rival Target, which had a slow start to the holiday season, rebounded with a 4.7 percent gain in same-store sales in December, better than the 4.6 percent estimate. Total sales rose 11.6 percent. Sears Holdings announced mixed results. It said same-store sales tumbled 11.9 percent at Sears stores for the nine-week period ended Dec. 31 because of a lack of special promotions. Meanwhile, same-store sales at its Kmart stores rose 1 percent. Costco posted a 7 percent gain in same-store sales, beating the 6 percent estimate from analysts. Total sales rose 10 percent. Luxury retailers again had the best performance among department stores. Nordstrom reported a 7.7 percent gain in same-store sales, much better than the 3.8 percent Wall Street expected. Total sales rose 10.7 percent. Federated Department Stores Inc. posted a 3.4 percent gain in same-store sales, better than the 2.1 percent forecast. Total sales, which include stores from the company's 2005 acquisition of May Department Stores Co., rose nearly 100 percent. "We are pleased with Macy's and Bloomingdale's performance in December, despite disruptions caused by the New York City transit strike the week before Christmas," said Terry J. Lundgren, chairman, president and CEO in a statement. J.C. Penney Co. Inc had a 2.2 percent same-store sales gain in its department store group, missing the 2.5 percent analyst estimate. Total sales rose 3.1 percent. Gap posted a 5 percent decline in same-store sales, worse than the 4 percent drop analysts expected. Total sales fell 9 percent. Limited Brands Inc. had a solid 3 percent same-store sales gain, though it was less than the 3.4 percent forecast. Total sales rose 5 percent. Abercrombie & Fitch, which refrained from heavy discounting, had a 29 percent gain in same-store sales, beating the 18.2 percent estimate from Wall Street. Total sales rose 41 percent. On Wednesday, American Eagle Outfitters Inc. announced a 9.8 percent same-store sales gain, well exceeding the 3.5 percent estimate. Total sales rose 15.5 percent. Aeropostale Inc., which heavily discounted this holiday season, said Wednesday it had an 11.4 percent increase in same-store sales, far exceeding the 4.3 percent forecast.

#2 magickallight  OFFLINE  

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Posted Jan 5, 2006 - 12:01 pm

I helped them all I could! - LoL!

“The more I know about people, the more I love my dog.” ~ Mark Twain.





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