Leading U.S. retailers announced weaker-than-expected same-store sales for November, as superstorm Sandy weighed on customer traffic and sentiment.
Excluding drug stores, more than a dozen retailers on average reported a 1.6 percent increase in sales at stores open at least one year, far below the 3.5 percent gain seen last year in November. Analysts had expected an increase of 3.3 percent, according to Thomson Reuters. November same-store sales are often seen as an early indication on the holiday shopping season. Although the results were disappointing, analysts tried to remain positive.
“Sandy had a big impact on a very important part of the country,” said Nancy Liu, retail strategist at Kurt Salmon, according to WSJ. “The region drives so much of consumer spending and commerce. But the distraction of Sandy in November may mean there will be some momentum in December from pent up demand.”
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Macy’s (NYSE:M), the second biggest U.S. department store, reported a same-store sales decrease of 0.7 percent, missing estimates for a 1.5 percent gain. “Despite the largest-volume Thanksgiving weekend in our company’s history, we were not able to overcome the weak start to the month, which included the disruption of hurricane Sandy. Yet we remain on track to deliver a very strong sales performance in the fourth quarter, consistent with our guidance,” said Terry J. Lundgren, chairman, president and chief executive officer of Macy’s.
Target (NYSE:TGT), the second largest department store in nation, posted a 1.0 percent decline in same-store sales. Estimates called for a 2.1 percent increase. “November sales were below our expectations, reflecting weaker-than-planned sales performance in the first two weeks combined with stronger sales growth across all channels later in the month,” said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation. “Profitability for the month remained on plan, reflecting our efforts to balance thoughtful price investments in an intensely competitive environment with our continued focus on driving sales.” Wal-Mart (NYSE:WMT), the largest retailer in the world, does not report monthly figures.
Other retailers such as Gap (NYSE:GPS) and Nordstrom (NYSE:JWN) also missed estimates by announcing a decrease in November same-stores sales. Kohl’s (NYSE:KSS) logged a whopping 5.6 percent decline in sales, missing estimates for a 1.9 percent gain. Shares of the Wisconsin-based retailer plunged more than 9 percent on Thursday. On the positive, Costco Wholesale (NASDAQ:COST) and Limited Brands (NYSE:LTD) both beat expectations with same-store sales growth of 6.0 percent and 5.0 percent, respectively.
Although many analysts and retailers are upbeat on the holiday season, due to a strong showing over the Black Friday weekend, the latest gross domestic report from the Commerce Department shows that consumers are still scaling back. In the third quarter, household purchases climbed at a meager 1.4 percent pace, the weakest gain in over a year and lower than the 2.0 percent increase previously reported. The revised figure was also lower than any of the 18 estimates made by economists, with the median forecast being 1.9 percent.
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