Wal-Mart predicts December same-store sales gain of zero to 1 percent
Thursday, November 30th 2006, 7:43 am
By: News On 6
NEW YORK (AP) _ Wal-Mart Stores Inc. issued a sobering warning for the holiday shopping season Thursday, predicting its December same-store sales gain would be no better than 1 percent.
The news, coupled with Wal-Mart's expected announcement that it suffered its first same-store decline in more than 10 years during November, came as the nation's retailers reported an overall mixed sales performance for the month. Same-store sales reflect business at stores open at least a year and are the industry standard for measuring a retailer's strength.
The nation's largest retailer reported a 0.1 percent dip in same-store sales. Including a drop in gasoline revenues from its Sam's Club division, which Wal-Mart did not include in its calculation, same store-sales fell 0.3 percent.
Wal-Mart has struggled in recent months on a mix of problems, including the fact that its lower-income customers were hurt by soaring gas prices. But the company's lackluster sales have persisted even as the cost of gas eased, an indication that shoppers are turning away from merchandise like apparel, and sticking with basics like food and consumer products.
``This is pretty discouraging,'' said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. But he added that Wal-Mart's weak sales will not be a harbinger of a broad based weakness across the retail sector.''
Wal-Mart's discount stores suffered a 0.5 percent decline, while Sam's Clubs had a 2.0 percent increase.
One of the company's problems has been its inability to understand what its customers are looking for. It filled its clothing racks with too many trendy items like skinny jeans that shoppers just didn't want.
Meanwhile, reports from other retailers were mixed.
J.C. Penney Co. said same-store sales rose 1.4 percent, helped by strong sales of jewelry, children's goods and home products. But the results fell short of the 3.7 percent forecast of analysts polled by Thomson Financial.
Costco Wholesale Corp. reported a 5 percent gain in same-store sales, below the 5.7 percent estimate.
Nordstrom Inc. had a 5.4 percent gain in same-store sales, matching Wall Street expectations.
Limited Brands Inc. had a 12 percent increase in same-store sales, exceeding the 7.8 percent estimate.
Teen retailers generally did well. Wet Seal Inc. had a 5.5 percent same-store gain, beating the 4.0 percent estimate. But Bebe Stores' 5.8 percent gain fell below the 7.9 percent estimate from Wall Street.
American Eagle Outfitters Inc. said Wednesday its same-store sales rose 14 percent in November from year-ago levels, boosted by a strong start to the holiday shopping season. The results were in line with Wall Street's estimate for a 14.8 percent gain.