News

January 07, 2010
WWD - RETAIL SALES FIRM IN DECEMBER

Retailers appear to have gotten what they wanted out of December – a slight improvement in sales trends and margins and inventory levels that bode well for their fourth-quarter profits.

While decreases moderated for many and results even broke into positive territory for some, including Macy’s Inc., same-store sales were unspectacular but improved over last year’s especially soft performance. Numbers were healthy enough that several retailers – including Macy’s, Limited Brands Inc., Aeropostale Inc., Destination Maternity and even Sears Holdings Corp. – lifted their fourth-quarter guidance, and others said they would land at the high end of previously issued projections.

“We achieved our sales goals for December despite the continued economic uncertainty,” said Terry Lundgren, chairman, president and chief executive officer of Macy’s, which, helped by a 29.4 percent leap in online sales, posted a 1 percent increase for the season as it raised fourth-quarter guidance to a range of $1.14 to $1.18 versus a previous outlook of $1 to $1.05. Bloomingdale’s enjoyed an especially healthy month “highlighted by success in gifts and designer brands.”

Gap also managed a positive same-store sales performance for the month, growing 2 percent as results trended upward 7 percent at Old Navy and 1 percent at Gap North America despite a 3 percent decline at Banana Republic.

“We’re pleased that our planned promotions and holiday assortments allowed us to compete effectively while delivering merchandise margins significantly above last year,” said Sabrina Simmons, chief financial officer of Gap, in a comment echoed by other retail executives, even those not posting increases.

While Abercrombie & Fitch Co. continued to struggle with a 19 percent comparable-store sales decline for the month, other teen retailers enjoyed positive results, including American Eagle Outfitters Inc., with a 7 percent gain versus a 17 percent decline in December 2008, and Aeropostale, which remained hot with a 10 percent increase. Buckle was up 6.6 percent for the period.

Among early filers, The Bon-Ton Stores Inc. was down 2.6 percent while Dillard’s Inc. saw a 7 percent decline. Stage Stores Inc. was down 2.2 percent for the month.

From WWD.COM
by Arnold J. Karr