U.S. retailers reported their same-store sales for February and the results were better than expected.
Reports show overall retail industry same-store sales increased 0.3%, beating analysts' predictions of a decline of 1.3%, according to Thomson Reuters. The increase was due to Wal-Mart clobbering expectations by posting a 5.1% same-store sales increase, as well as retailers controlling inventory.
A few retailers beat Wall Street estimates by either posting gains, or posting declines that were less than expected. Aeropostale reported an 11% increase in same-store sales which was higher than the 6.9% increase analysts predicted. Gap Inc. said sales fell 12%, beating estimates of a15.4% decline. Limited Brands Inc., the parent company of Victoria's Secret, dropped 7% which was better than analysts' estimate of a 7.6% drop.
So, is this a sign that the apparel sector is beginning a turnaround? Not necessarily. Despite these bright spots, reports show that apparel was down 5.6% and department stores declined 9% compared to the previous year.
Macy's Inc. reported same-store sales down 8.5% for February, more than the 7.3% analysts predicted but within management's expectations. However, online sales -- which include macys.com and bloomingdales.com -- increased 16.2%.
Luxury retail continues to struggle the most as a result of consumers opting for food and necessities instead of discretionary items like high end clothing. The International Council of Shopping Centers reports February same-store sales for luxury stores dropped 19.2% compared to a 0.1% drop of all the chains it monitors.
Saks Inc. was the worst performer in the sector with a 26.8% drop in same-stores sales in February, experiencing weakness across all merchandise categories, particularly women's apparel. Eveningwear, fragrance, women's and men's accessories and their OFF 5TH stores showed relative strength for the month.
February same-store sales for Neiman Marcus tumbled 20.9% with weakness in across all regions and merchandise categories.
Nordstrom, Inc. reported February sales decline 15.4%, more than the 13.6% drop analysts predicted.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Thursday, March 5, 2009
Thursday, January 8, 2009
December Same-Stores Sales Results Bring The Pain To The Retail Industry
Well, the December same-store sales results of the nation's retailers are in and it ain't pretty.
Deep holiday discounts were not enough to save the apparel sector. Macy's, Inc. reported same-store sales down 4% for December, less than the 5.3% decline analysts projected.
Luxury stores were hit the hardest, undoubtedly a reflection of the Wall St. layoffs and affluent consumers experiencing major losses in their investment portfolios.
Neiman Marcus, Inc. led the pack with a 27.5% drop in December same-store sales, experiencing losses across all merchandise categories.
December same-store sales for Saks, Inc. decreased 19.8%, almost twice as much as analysts predicted, with weakness in the women's apparel, outerwear, men's clothing and advanced sportswear, women's shoes, and handbags categories.
Coach, Inc., one of the few retailers that did not discount their merchandise, in an attempt to protect their "brand proposition", reported same-store sales for the quarter declined 13%. As a result, earnings expectations for the second fiscal quarter were lowered 3% to $0.67 per share.
Nordstrom, Inc. cited industry wide competitive markdowns as the reason for it not meeting earnings expectations of $0.35 to $0.45 per share.
The biggest surprise was Wal-Mart. The world's biggest retailer reported same-store sales increased 1.7%, but it didn't meet the 2.7% estimate, thus it was forced to cut earnings estimates to $0.94 per share, down from projected $1.07 per share.
Things will probably get worse for retail. Thanks to some retailers not offering discounts, they have an abundance of inventory that needs to be cleared out before the spring shipments arrive. In order to get rid of inventory, they'll be forced to discount which cuts into their bottom line. Combine that with January and February historically being slow because consumers are waiting for Spring collections.
Deep holiday discounts were not enough to save the apparel sector. Macy's, Inc. reported same-store sales down 4% for December, less than the 5.3% decline analysts projected.
"The holiday shopping season ended with strong sales in the fourth and fifth weeks of December after a slow start to the month and unfavorable weather conditions in the Northeast, Midwest and Pacific Northwest," said Terry J. Lundgren, Macy's, Inc. chairman, president and chief executive officer. "We went into the fourth quarter with an objective of reducing inventory levels to position us for 2009. We are pleased to have accomplished that objective with approximately 7.5 percent lower inventory on a comparable store basis at the end of December compared with last year."Ironically, meeting that objective, via markdowns and sales, has caused the company to cut its earnings per share expectations for the fourth quarter ($0.90 to $1.00 per share vs. $1.10 to $1.30 per share) and fiscal '08 ($1.10 to $1.20 vs. $1.30 to $1.50). There are also plans to close 11 underperforming stores.
Luxury stores were hit the hardest, undoubtedly a reflection of the Wall St. layoffs and affluent consumers experiencing major losses in their investment portfolios.
Neiman Marcus, Inc. led the pack with a 27.5% drop in December same-store sales, experiencing losses across all merchandise categories.
December same-store sales for Saks, Inc. decreased 19.8%, almost twice as much as analysts predicted, with weakness in the women's apparel, outerwear, men's clothing and advanced sportswear, women's shoes, and handbags categories.
Coach, Inc., one of the few retailers that did not discount their merchandise, in an attempt to protect their "brand proposition", reported same-store sales for the quarter declined 13%. As a result, earnings expectations for the second fiscal quarter were lowered 3% to $0.67 per share.
Nordstrom, Inc. cited industry wide competitive markdowns as the reason for it not meeting earnings expectations of $0.35 to $0.45 per share.
The biggest surprise was Wal-Mart. The world's biggest retailer reported same-store sales increased 1.7%, but it didn't meet the 2.7% estimate, thus it was forced to cut earnings estimates to $0.94 per share, down from projected $1.07 per share.
Things will probably get worse for retail. Thanks to some retailers not offering discounts, they have an abundance of inventory that needs to be cleared out before the spring shipments arrive. In order to get rid of inventory, they'll be forced to discount which cuts into their bottom line. Combine that with January and February historically being slow because consumers are waiting for Spring collections.
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