NEW YORK ? Many retailers delivered solid sales gains for December, but heavy discounts needed to get shoppers to buy exacted a high price, clouding the holiday shopping season.
Merchants had to mark down coats and other gifts to get shoppers to buy in a challenging economy. A mild start to winter also didn't help, wilting shoppers' appetite for cold-weather merchandise. That resulted in a string of retailers reducing their earnings outlooks.
The need for discounts is also raising concern about what it will take to get shoppers to spend again in coming months.
Retailers collectively reported a 3.5 percent increase in monthly revenue at stores open at least a year ? an indicator of a merchant's health, according to the International Council of Shopping Centers' tally of 25 merchants.
For November and December combined, holiday sales rose 3.3 percent, a solid increase, but still behind last year's 3.8 percent pace.
With shoppers sticking to a tight budget given high employment and paltry wage growth, there were clear winners and losers. Limited Brands Inc., Macy's Inc. and Nordstrom Inc. posted strong revenue gains that beat analysts' estimates. Macy's and Limited even boosted their earnings outlooks.
In contrast, Target Corp., Kohl's Corp., and J.C. Penney Co. cut their earnings outlooks after reporting weaker-than-expected sales.
"The holiday season was OK," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "But because of the extremely competitive environment, stores had to do whatever it took to get those sales, and that affected profits."
December's results offer an important benchmark for retailers and economists. During the holiday shopping season, merchants can make up to 40 percent of their annual revenue. The period that runs from November through December also gives valuable insights into what it takes to get Americans to spend in the weak economy.
Clearly, the rich kept spending, but for everyone else, it took either a hot item like the iPad or a lot of "50 percent off" signs to win over shoppers. For the semi-official start of the holiday shopping season, stores opened as early as Thanksgiving Day, plying shoppers with discounts that resulted in record sales. Many also plied online shoppers with free shipping and promised to match prices with that of rivals.
But shoppers took a longer-than-usual breather after the early splurge. A mild winter and the fact that Christmas fell on a Sunday encouraged people to wait until the last minute.
That forced some stores to discount more than they had planned in the final days before Christmas to attract shoppers. Post-Christmas bargains were even better. Express stores, for example, promoted an "End of Season" sale, with merchandise prices reduced by up to 70 percent.
Costco Wholesale Corp.'s revenue at stores open at least a year rose 7 percent in December, narrowly missing Wall Street's expectations.
Target posted a 1.6 percent gain in December as consumers waited until the last minute to shop and electronics sales were weak. The company lowered its fourth-quarter earnings guidance, and its stock tumbled in
The discounter has faced heightened competition from Wal-Mart Stores Inc., which brought back layaway in toys and electronics for the holiday season and is hammering its low-price message.
Wal-Mart no longer reports sales on a monthly basis.
Among department stores, business was mixed.
More expensive stores enjoyed a strong season, as the wealthy shrugged off volatile swings in the stock market. Nordstrom had an 8.7 percent increase in revenue at stores opened at least a year. That was above the 5.1 percent forecast. Saks Inc., which operates Saks Fifth Avenue, posted a 5.8 percent increase, meeting Wall Street estimates.
Macy's benefited from its efforts to tailor merchandise to local markets. It posted a 6.2 percent increase in December. The results beat Wall Street's estimate of 5 percent. For November and December combined, revenue at stores opened for a year rose 5.7 percent.
But J.C. Penney Co. and Kohl's Corp., both of which target middle income shoppers, had a more challenging season. Kohl's posted a 0.1 percent decline, well below Wall Street's 2.2 percent estimate.
"Our December sales results were short of our expectations although much improved over November's results," said Kevin Mansell, Kohl's chairman, president and chief executive officer in a statement.
Penney reported a slim 0.3 percent increase in revenue at stores open at least a year. It noted better trends in its stores during the week leading up to Christmas and increases in traffic and orders on its website during the week after Thanksgiving and the week before Christmas.
Among specialty retailers, Limited, the parent of Victoria's Secret and Bath and Body Works, had stellar results. Revenue at stores open at least a year rose 7 percent in December.
concord billy the kid safe and sound botticelli x factor winner footlocker julia gillard
No comments:
Post a Comment