IE 11 is not supported. For an optimal experience visit our site on another browser.

Retailers report decent Dec. sales

Last-minute shoppers gave the nation's retailers a generally solid holiday season, with some apparel retailers and discounters enjoying particularly robust sales.
/ Source: The Associated Press

Last-minute shoppers gave retailers a mixed yet overall respectable 2004 holiday season, with a variety of stores from discounters to apparel retailers reporting better than expected sales.

It was hard to discern a trend as merchants reported their December sales results Thursday — there were strong and weak performers in every retail sector. Costco Wholesale Corp., Target Corp. and upscale merchants like Neiman Marcus Group Inc. all surpassed Wall Street projections. The disappointments included Pier 1 Imports Inc. and jeweler Zale Corp.

Wal-Mart Stores Inc., which had to step up discounting after a slow start to the holiday season, posted a decent but not outstanding 3 percent increase in same-store sales, or sales at stores open at least a year. That was a little better than Wall Street’s forecast.

“We are faring better than expected, but the results are still split,” said Ken Perkins, an analyst at RetailMetrics LLC, a research firm. “Stores that have been struggling over the last couple of months appear to be continuing that trend. And for stores that have been doing well over the last several months, December was a good month.”

The International Council of Shopping Centers-UBS preliminary same-store sales tally of about 50 retailers for December rose 3.1 percent, at the low end of the 3 percent to 3.5 percent that the group’s chief econonist, Michael P. Niemira, had expected.

That means that same-store sales for the combined November-December period will be at the low end of Niemira’s range of 2.5 percent to 3 percent. November’s final same-store sales tally was up 1.8 percent.

As Niemira noted, the holiday season “had a lot of things going on,” making it difficult to measure its success. The season was marked by the increasing popularity of gift cards, whose sales are not recorded until consumers redeem them, and the increasing popularity of online shopping, whose sales are not included in same-store results.

Online sales for the November and December period rose a better-than-expected 28 percent to $15.8 billion, according to comScore Networks Inc.

The holiday season had an uneven start, and retailers didn’t report a significant pickup in business until the last week, when many consumers finally started their shopping. At apparel retailer AnnTaylor Stores Corp., sales “were better than we had anticipated given November’s weak performance, with most of the improvement coming in week five” of the season, chairman J. Patrick Spainhour said in a statement.

Although procrastinating has become the norm in the holiday season, consumers’ uneasiness contributed to their late shopping — they were looking for marked-down merchandise. While gasoline prices have fallen, they are still high, and consumers, particularly low- and middle-income Americans, have cut spending on non-essentials. Many consumers are also worried about job security.

Wal-Mart, whose customers are most vulnerable to the economy’s woes, had to work hard to generate December’s modest same-store sales increase. That was at the high end of the company’s projections, and higher than the 2.3 percent gain forecast by Wall Street analysts in a survey by Thomson First Call.

Target had a 5.1 percent gain in same-store sales, better than the 4.2 percent estimate. Total sales rose 11.3 percent.

Costco had a 9 percent increase in same-store sales, better than the 6.4 percent Wall Street expected. Total sales rose 11 percent.

ShopKo Stores Inc. reported a 5.3 percent decline in same-store sales, worse than the 3.0 percent forecast. Total sales fell 5.5 percent.

TJX Cos. Inc. reported a 6 percent increase in same-store sales, above the 2.8 percent Wall Street anticipated. Total sales rose 15 percent.

“In general, Christmas business surged late in December, as we had expected,” said Edmond J. English, president and chief executive officer in a statement.

Among department stores, upscale merchants did the best. Neiman Marcus enjoyed a 10.8 percent increase in same-store sales, better than the 7.9 percent Wall Street anticipated. Total sales rose 8.2 percent.

Federated Department Stores Inc. had a 2.3 percent increase in same-store sales in December, better than the 1.1 percent increase that Wall Street expected. Total sales rose 1.9 percent.

Dillard’s Inc. had a 1 percent gain in both same-store sales and total sales. Analysts expected a 2.7 percent decline in same-store sales.

Among apparel chains, Limited Brands Inc. had a modest 2 percent gain in same-store sales, better than the 1.4 percent estimate. Total sales rose 2.6 percent.

Moderate apparel retailer Chico’s FAS Inc. had an 18.3 percent gain in same-store sales, well exceeding the 5.9 percent Wall Street expected. Total sales rose 41.3 percent.

AnnTaylor had a 1.5 percent same-store sales decline. Still, that was much better than the 10.2 percent Wall Street expected. Total sales increased 11.1 percent.

But Pier 1 suffered an 8.8 percent decline in same-store sales, and consequently reduced its fourth-quarter earnings outlook. Analysts had expected a 4.3 percent decline; total sales fell 3.5 percent.

And Zale reported a 0.7 percent decline in same-store sales for the combined November and December periods. It did not break out the figure for December. Total sales for the two-month period increased 2.1 percent.

Teen retailer Pacific Sunwear of California Inc. had a 5.3 percent same-store sales increase; Wall Street expected 4.0 percent. Total sales rose 16.4 percent.

On Wednesday, American Eagle reported same-store sales soared 32.8 percent, well exceeding the 18.8 percent forecast. Total sales rose 41.2 percent.

Also Wednesday, Nordstrom Inc. reported a same-store sales gain of 9.3 percent, better than the 3.6 percent analysts expected. Total sales were up 11.7 percent.