December retail sales rise 4.5%

Report on chains seen as mixed bag; late holiday discounts cited

Shoppers exit an OfficeMax store in Peoria, Ill., on Wednesday. Despite early signs of slow Christmas shopping, retailers tracked by Thomson Reuters reported sales that beat analyst expectations.

Shoppers exit an OfficeMax store in Peoria, Ill., on Wednesday. Despite early signs of slow Christmas shopping, retailers tracked by Thomson Reuters reported sales that beat analyst expectations.

Friday, January 4, 2013

— Many major U.S. retailers were able to recover from a slow start to December shopping, according to monthly sales results reported Thursday.

Despite early indications that Christmas shopping would be lackluster, the 17 chains tracked by Thomson Reuters reported a 4.5 percent increase in sales at stores open at least a year in December, exceeding the 3.3 percent gain analysts had expected.

However, Target, the nation’s second-biggest retailer after Wal-Mart, said its December sales were flat.

Retailers relied on discounts to generate December revenue, which may hurt results when they report fourth-quarter profit.

“Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned,” said Kevin Mansell, Kohl’s chief executive and chairman.

He said the company would take further markdowns as it gets ready for spring.

The stores reporting sales data Thursday ranged from apparel retailers to department stores, although some large retailers including J.C. Penney Co., Dillard’s Inc. and Wal-Mart Stores Inc. do not report monthly data.

Analysts noted a rush of last-minute deals after slow sales early in the month.

“We’ve noticed significant promotions at retailers looking to recover preholiday sales, and fewer promotions at retailers we believe have performed well,” Oliver Chen, a Citigroup analyst, wrote in a research note.

ShopperTrak, which counts shoppers at the nation’s malls, reported that traffic picked up in the final week before Christmas. Still, in December it lowered its sales forecast for November and December to a 2.5 percent gain over last year, down from the 3.3 percent it had estimated previously.

Another reading on the Christmas season was also tepid. MasterCard Advisors SpendingPulse, which estimates overall consumer spending, said last week that holiday-related sales rose 0.7 percent from the end of October through Christmas Eve, the smallest increase since 2008. Last year, sales were up 2 percent.

Most of the department stores reporting results Thursday beat analyst expectations.

At Nordstrom, sales at stores open at least a year, a measure known as same-store sales, were up 8.6 percent, shooting past estimates of 3.4 percent. Kohl’s said its same-store sales rose 3.4 percent, above analyst estimates of 1.2 percent but below Kohl’s internal expectations. Macy’s same-store sales were about in line with analyst expectations, at 4.1 percent. Macy’s said fourth-quarter earnings would be in a lower range than it had previously announced, at $1.91 to $1.96 a share, down from $1.94 to $1.99 a share.

Target, which heavily promotes the Christmas season, said its same-store sales were flat compared with last December, while analysts had expected a 0.8 percent gain. Its much-hyped collection of designer holiday gifts, a partnership with Neiman Marcus, had been something of a bust, according to some analysts. The company said the number of same-store transactions fell compared with 2011, but the average amount spent per transaction rose, and that the food, health and beauty, apparel and home categories were up over last year.

“Strong results late in the month did not completely offset softness in the first three weeks,” Gregg Steinhafel, chairman and chief executive, said in a statement.

The discounter Costco did much better than expected, with a 9 percent same-store sales gain, above the 6.5 percent that analysts had projected.

Among apparel stores, the teen retailers Wet Seal and Zumiez did particularly poorly, posting decreases of 9.7 percent and 1 percent.

With drugstores included in the retail sales totals, the rise in December from a year ago was 2.3 percent, Thomson Reuters said. Drugstores are dealing with consumers switching to cheaper generic drugs.

Business, Pages 23 on 01/04/2013