December Sales Didn't Do Much to Lift Our Spirits
Macy's, Gap, Bon Ton
WWD reported that stores posted soft December sales as consumers held back their holiday purchases until the last minute, and in many cases did without them.
Same-store sales results for the month overall came in below expectations. Shoppers seemed to be procrastinating their shopping and trying to get the best sale. There were a few exceptions - Macy's Inc., which just beat analysts' expectations with a 4.1% increase in comparable-store sales for the month, and Gap Inc., which continued its string of strong months with a 5% comp increase overall.
Terry Lundgren, chairman, president and chief executive officer of Macy's, commented, "While the rate of growth was somewhat less than we had expected in the first two months of the fourth quarter, it came amid some significant headwinds from uncertain economic news and the lingering effects of Hurricane Sandy."
Gap's results were highlighted by a 13% comp increase for the month at Old Navy, trailed by a 2% lift at Gap North America and a 1% lift at Banana Republic. "Customers responded favorably to our product offerings and promotions during the holiday season overall," said Glenn Murphy, Gap's chairman and ceo. "We're pleased to continue delivering positive comps across all our brands in North America."
A more typical performance for the month was the flat performance at Target Corp., which came against expectations of a 0.8% increase. "December sales were slightly below our expectations, as strong results late in the month did not completely offset softness in the first three weeks," said Gregg Steinhafel, Target's chairman, president and CEO.
The Buckle Inc. eked out a 1% comp gain for the month, compared to estimates of a 0.3% decline, while Cato Corp. and The Wet Seal Inc. were among stores reporting big misses. Cato, expected to drop 1 point, was down 7%, prompting it to reduce its fourth-quarter profit guidance downward, while Wet Seal, expected to drop 5%, instead was off 9.7%.
The Bon-Ton Stores and Stage Stores Inc. reported increases for the month of 2.4 and 2.7%. Brendan Hoffman, president and CEO of Bon-Ton, mentioned that the increase came "despite several days of challenging weather which adversely impacted our post-Christmas sales event" and left the department store group with less clearance inventory than a year ago.