The outlook for the holiday season dimmed yesterday as several of the nation’s large retailers reported disappointing sales for November, which included an uninspiring Thanksgiving weekend, The Associated Press reports.
As the big merchants released their first solid results for the start of holiday shopping, downbeat reports came from across the sector, including Wal-Mart Stores Inc., Limited Brands, Federated Department Stores Inc., and Gap Inc.
Even upscale retailers Nordstrom Inc. and Neiman Marcus Group Inc., which have consistently surpassed Wall Street’s projections, fell short of estimates, although they still had strong gains.
Among the exceptions were J.C. Penney Co. Inc. and Sears, Roebuck & Co., which beat Wall Street forecasts, the AP reports. Their business got a boost from strong sales over the Thanksgiving weekend, as these stores successfully wooed customers with bigger discounts than a year ago.
Another bright spot was teen retailing, particularly American Eagle Outfitters Inc., the Warrendale, Pa., company whose sales soared past analyst estimates.
The bottom line for merchants nationwide was a poor start for their most important part of the year, the AP reports.
“This can’t bode well for the holiday season,” Ken Perkins, an analyst at RetailMetrics L.L.C., a research firm in Swampscott, Mass., reportedly said “There is going to be more pressure on retailers to aggressively mark down merchandise to capture foot traffic and more sales that didn’t materialize in November.”
The International Council of Shopping Centers-UBS sales tally of 71 retailers rose 1.7% for November, less than the scaled-back forecast of 2.5% to 3%. The tally is based on same-store sales.
Wal-Mart—which acknowledged Monday that its Thanksgiving weekend sales suffered because it had not discounted as heavily as competitors—said it was launching a new advertising campaign to remind its customers of its low prices, the AP reports. Bombay Co. said it would step up price-cutting, and Gap suggested it was considering the same.
Wal-Mart, the world’s largest retailer, reported a 0.7% same-store sales gain.
Among luxury retailers, Neiman Marcus had an 8.4% increase in same-store sales, slightly below the 9.8% forecast, the AP reports. Nordstrom’s same-store sales rose 3.1%, below the 5% forecast.
Same-store sales fell 5% at Limited Brands, 4% at Gap, 8.3% at Ann Taylor, 13% at Bombay, 1.4% at Federated Department Stores, and 7.7% at May Co.
But discounter Target, whose merchandise appeals to both upscale and low-income consumers, had a 3.2% gain in same-store sales.
And Sears and Penneys pleased Wall Street. Sears, which has been languishing in a sales slump, posted a 2.8% gain in its domestic business, better than the 0.3% decline analysts expected.
Penneys’ same-store sales rose 12%, beating the 11% forecast.
Meanwhile, American Eagle had a 24.3% same-store sales gain in November.