Cold weather, clearance sales help major retailers beat analysts' forecasts for January
Thursday, February 5th 2004, 12:00 am
By: News On 6
NEW YORK (AP) _ Record-breaking cold and clearance sales helped lift January sales above expectations for many retailers, including merchants who lagged behind their competitors in recent months, according to results released Thursday.
Wal-Mart, Sears, Roebuck and Co. and Abercrombie & Fitch were among companies with better-than-expected results. There were a few disappointments, including Talbots, which blamed sharper-than-expected sales declines on its lack of winter inventory.
The January increase followed what was a respectable holiday season for many retailers, suggesting to analysts that a previously uneven recovery in consumer spending seems to be gaining more traction.
``This is definitely a lot stronger than expected,'' said Michael P. Niemira, chief economist at the International Council of Shopping Centers. ``And it is across the board. This is a taste of the kind of performance we're likely to see in 2004.''
He added that the frigid weather was more of a positive than a negative, helping to boost sales of winter apparel and other cold-weather items.
January _ the last and least important month in the retail-sales calendar _ was not expected to be strong, given that stores did not have mounds of inventory to clear. But some companies, including Gap, reported they did well with regular-priced merchandise, including spring apparel.
Niemira said the International Council of Shopping Centers-UBS preliminary sales tally of about 71 retailers was up 5.8 percent for the month, much better than the 4 percent to 4.5 percent gain he expected. The tally is based on what the industry calls same-store sales, those from stores open at least a year. They are considered the best measure of a retailer's health.
Wal-Mart, the world's largest retailer, reported that January same-store sales were up 5.7 percent, topping the 4.1 percent estimate of analysts surveyed by Thomson First Call. Total sales were up 14.3 percent.
Rival Target Corp. posted a 5.1 percent increase, better than the 4.7 percent Wall Street expected. Total sales were up 11.9 percent.
Meanwhile, sales picked up at midpriced department stores that had languished recently.
Sears reported a same-store sales increase of 4.6 percent in its domestic business; analysts expected a modest 0.4 percent increase. Total sales also gained 4.6 percent.
Same-store sales also rose at Kohl's Corp., May Department Stores and J.C. Penney.
Even teen retailer Abercrombie & Fitch reported a 2 percent increase in same-store sales, well exceeding Wall Street's forecast of an 8.1 percent decline. Total sales were up 22 percent. It also raised its fourth-quarter earnings outlook.
At Talbots, however, same-store sales fell 11.8 percent, and total sales declined 5 percent.