Archive for Friday, December 3, 2004

Retailers report ho-hum start to holidays

December 3, 2004


— The nation's retailers had a disappointing start to the holiday season, reporting sluggish November sales as a much-hoped-for surge in Thanksgiving weekend business failed to materialize.

As merchants released their first solid results for the season Thursday, retailers issuing downbeat reports included Wal-Mart, Limited Brands and Federated.

Even high-end stores like Nordstrom, which have enjoyed a sales surge during the past year, had modest gains.

Among the exceptions were J.C. Penney and Sears, Roebuck, which surpassed Wall Street forecasts. Business was boosted by strong sales during the Thanksgiving weekend, as these stores successfully wooed customers with big discounts and earlier store openings.

But overall, the industry struggled through the month.

"This can't bode well for the holiday season," said Ken Perkins, an analyst at RetailMetrics Inc., a research firm based in Swampscott, Mass.

Consumers, particularly low- and middle-income Americans, have been forced to cut spending on clothing and other non-necessities as gasoline prices and grocery bills rise. They're also nervous about jobs -- on Tuesday, the Conference Board reported that consumer confidence was down in November for a fourth consecutive month.

The International Council of Shopping Centers-UBS sales preliminary tally of 66 retailers increased 1.7 percent for November, lower than the reduced forecast of 2.5 percent to 3 percent range.

The tally is based on what the industry calls same-store sales, or sales at stores opened at least a year. They are considered the best indicator of a retailer's performance.

Wal-Mart, the world's largest retailer, reported a meager 0.7 percent increase in same-store sales. Its total sales increased 8.7 percent.

Wal-Mart's results met Wall Street's forecasts that were reduced earlier this week, after the discounter warned that its business the day after Thanksgiving was disappointing.

Costco reported same-store sales rose 5 percent. Analysts surveyed by Thomson First Call expected 5.8 percent gain. Total sales rose 7 percent.

Limited Brands had a 5 percent decline in same-store sales, far worse than the 4.8 percent increase Wall Street expected. Total sales declined 2.9 percent.

Federated reported that same-store sales were down 1.4 percent, well below the 1.2 percent gain analysts had forecast. Total sales declined 1.6 percent.

Nordstrom had a 3.1 percent gain in same-store sales in November, lower than the 5 percent forecast. Total sales rose 6.2 percent.

But Sears and Penney had results that pleased Wall Street.

Sears, which has been languishing in a sales slump and is merging with Kmart Holdings Corp., posted a 2.8 percent gain in its domestic business, much better than the 0.3 percent decline Wall Street expected. Total sales increased 1.9 percent.

Penney had a 12 percent increase in same-store sales for the month, slightly beating Wall Street projections for a 11 percent increase. Total sales increased 9.2 percent.

Commenting has been disabled for this item.