December Discounts Force Retailers to Lower Earnings Outlook

Mukesh Buch
05 Jan, 2013
New York City

Retailers reported rising sales but consumers held out for deep discounts late in the month and forcing at least 7 major chains to cut earnings outlook. Of the 17 chains, 5 reported a decline in same store sales and 11 chains sales advanced.

[R]1:50 PM New York – Retailers reported rising sales but consumers held out for deep discounts late in the month and forcing at least 7 major chains to cut earnings outlook. Of the 17 chains, 5 reported a decline in same store sales and 11 chains sales advanced.[/R]

December same store sales at 17 major retail chains increased 4.4%, tad higher than a year ago month increase of 4.2%.

Consumers held out for deep discounts before returning to retailers and electronics and apparel drove most of the increase in sales. Several retailers including Target Corp and Macy’s Inc lowered earnings outlook for the quarter.

Comparable sales at 17 companies tracked by 123jump.com rose 3.4% after falling 1.4% in November after Superstorm Sandy impacted sales.

Of the stores 16 stores tracked by 123jump.com, 5 chains reported a decline in comparable store sales and 11 chains sales increased and sales at 6 chains increased 5% or more.

The sales data are not as comprehensive as once they were as the number of retailers reporting monthly sales have steadily declined from nearly 60 only three years ago. Kohl’s and Target will no longer report monthly sales from 2013.

Costco Sales Up 9%

Costco Wholesale Corp ((COST)) reported November net sales climbed 12% to $11.21 billion. Comparable sales in the month at U.S. locations increased 8% and at international locations jumped 10% and across the company gained 9%.

Target Corporation ((TGT)) net retail sales in the month edged up 0.8% to $10.2 billion from a prior year month and comparable sales were flat.

FRED’S, Inc. ((FRED)) total sales for the month slipped 1% to $209.9 million compared to $213 million from a year ago. Comparable store sales dropped 4.2%.

Kohl’s and Macy’s Sales Rise 4%

Macy''s, Inc ((M)) December month same store sales advanced 4.1% and total sales increased 3.6% to $4.92 billion and online sales surged 51.7%.

The company estimated same-store sales for the fourth quarter 2012 to increase between 3% and 3.5% and sales to be up by approximately 4.2%.

Kohl’s Corporation ((KSS)) reported total sales in the month increased 4% to $3.37 billion from a year ago and same store sales gained 3.4% to in the month.

The retailer now expects diluted earnings per share for the fourth quarter between $1.60 and $1.62 from earlier outlook between $2 and $2.08 and for fiscal 2012 between $4.11 to $4.13 compared to previous estimate between $4.52 and $4.60.

Nordstrom, Inc. ((JWN)) sales advanced 9.4% to $1.72 billion from $1.57 billion and comparable sales jumped 8.6% for the month period ending on December 29.

The Buckle, Inc ((BKE)) comparable sales in the months rose 1% from a year ago and net sales in the month grew 1.8% to $185 million.

The Cato Corporation ((CATO)) sales in December slipped 4% to $103.3 million and comparable sales declined 7%.

The company lowered expectation of earnings per diluted share in the range of 34 cents to 36 cents from earlier guidance of 38 cents to 42 cents and for the full year now in the range between $2.17 and $2.19 compared to most recent guidance of $2.22 to $2.26.

The Gap, Inc ((GPS)) net sales in the month climbed 5% to $2.08 billion and comparable store sales jumped 5% compared to 4% drop in the prior-year month.

Comparable store sales at Gap North America locations grew 2%, at Banana Republic North America rose 1%. Old Navy North America jumped 13% and at international locations dropped 6%.

Limited Brands, Inc. ((LTD)) comparable store sales gained 3% and net sales in the month climbed 4.3% to $1.95 billion compared to $1.87 billion a year ago month.

Stein Mart, Inc ((SMRT)) comparable store sales in December surged 5.9% and total sales soared 6.4% from a year ago month to $176.5 million.

Stage Stores, Inc. ((SSI)) total sales in the month increased 5% to $287 million and comparable sales grew 2.7%.

TJX, Ross Sales Jump 10%

The TJX Companies, Inc ((TJX)) December sales climbed 10% to $3.6 billion and comparable sale jumped 6% from a year ago.

The off-price retailer lifted outlook for fourth quarter earnings per share to be in the range of 77 cents to 78 cents, a 24% to 26% increase.

For the full year, retailer now expects earnings per share to be in the range of $2.50 to $2.51 representing growth of above 20% from last year.

Ross Stores, Inc ((ROST)) monthly sales climbed 11% to $1.28 billion and same store sales soared 6% in the month.

The company continues to expect same store sales to increase between 1% and 2% growth in January.

The Wet Seal, Inc ((WTSLA)) comparable store sales declined 9.4% in the month and total sales slumped 7.2% to $62.9 million from a year ago month.

Comparable store sales in Arden B dropped 11.5% in December and total sales plunged 14.7% from a year ago month to $10.1 million.

Zumiez Inc. ((ZUMZ)) total net sales in December surged 15% to $120.3 million and comparable sales slid 1%.

Rite Aid Sales Decline 2.2%

Rite Aid Corporation ((RAD)) same store sales in the months slipped 2.2% from a year ago and front-end same store sales decreased 1.1%.

Pharmacy same store sales decreased 2.9% and included approximately negative 605 basis points from new generic introductions. Total prescriptions filled at comparable stores increased 1.7% compared to the prior year period.

Total drugstore sales in the month declined 2.7% to $2.054 billion from $2.112 billion for the same period of year ago.