Retailers report lackluster November sales
Thursday, December 6th 2001, 12:00 am
By: News On 6
NEW YORK (AP) _ Fears of a dismal holiday shopping season deepened Thursday as the nation's big retailers said their November sales dropped short of expectations. Even big discounts failed to move wary consumers, and unseasonably warm weather only made matters worse.
Discounters and other value-oriented stores, particularly Wal-Mart Stores Inc. and Costco Wholesale Club had the strongest results as consumers, worried about job security, shopped cautiously. Mall-based merchants, particularly apparel and department stores, suffered once more.
Most notably, Gap Inc., whose business has dropped precipitously, saw its sales at stores open at least a year, known as same-store sales, plummet 25 percent, worse than the 17 percent decline analysts expected.
Gap warned that fourth-quarter earnings would be ``considerably worse'' than the 6 cent per share loss reported in the third quarter, excluding a tax-related charge.
Federated Department Stores Inc. met expectations, but said it still anticipates December same-store sales to be down 11 percent to 14 percent and fourth-quarter sales to be off as much as 10 percent.
``Thanksgiving weekend was extremely subdued, and holiday will also be at best subdued,'' said Kurt Barnard, president of Barnard's Retail Report, based in Montclair, N.J. ``There was lack of traffic in the malls, and there was a sea of red ink at the stores.''
Jeffrey Feiner, a managing director at Lehman Brothers, said stores had to discount more heavily than usual to get consumers into the stores, but sales nonetheless were slightly below expectations. His index of 22 major retailers showed a same-stores sales gain of 1.3 percent, instead of the 3 percent Feiner expected.
Unseasonably warm weather, which stifled demand for winter apparel, exacerbated an already difficult situation for retailers.
But there was some positive economic news Thursday. The Labor Department reported that the number of Americans filing new claims for unemployment benefits dropped slightly last week while the total number getting benefits fell by the largest amount in 18 years.
The report added to signs that the recession might be bottoming out. But a recovery will come too late for merchants, who are bracing for the worst holiday season in 10 years.
Analysts were likely to look at November and December results together to get a good read on the holiday season. Due to a quirk in the calendar, sales at stores including Federated, May Department Stores Co., Kohl's Corp. and Target Corp., appeared stronger, because they were reported on a fiscal year basis, which this year includes one extra week. They will show a drop in same-store sales for December.
Conversely, other retailers, including Wal-Mart, and Sears Roebuck and Co. made adjustments for the period, and will show stronger gains in December. Wal-Mart had a 4.3 percent gain in same-store sales, coming in at the low end of analysts' projections. Total sales were up 12.8 percent.
Sears reported a 1.3 percent decline in domestic same-store sales, better than the 3.4 percent drop expected by analysts surveyed by Thomson Financial/First Call. Total domestic sales were unchanged.
Other selected November sales figures for leading retailers:
_AnnTaylor Stores Corp., same-store sales up 0.8 percent; total sales up 13.2 percent.
_Federated, same-store sales up 0.9 percent; total sales were up 0.6 percent.
_Kmart Corp, same-store sales down 2.6 percent; total sales down 1.9 percent.
_J.C. Penney Co. Inc., same-store sales at department stores up 0.6 percent; total sales down 2.8 percent.
_Target, same-store sales up 11.4 percent; total sales were up 19.4 percent.