Bargain-Hunters Put a Dent in November Retail Sales
By Phil Wahba
NEW YORK -- Several major U.S. retailers posted disappointing sales for November after cautious shoppers pinched their pennies at the start of a shorter holiday season.
Some of the companies that reported sales gains ramped up bargains to bring in shoppers who appeared hesitant to splurge.
Costco Wholesale (COST) said Thursday that sales at stores open at least a year rose 2 percent, below the 3.3 percent increase analysts were looking for, according to Thomson Reuters. The warehouse club chain said consumer electronics sales fell.
Same-store sales at L Brands (LTD), owner of the Victoria's Secret lingerie chain, also came in below expectations. Its drop of 5.5 percent was far deeper than the 1.1 percent decline analysts were projecting.
Wall Street analysts are expecting 11 top retailers to report a 2.7 percent increase in same-store sales for November, according to Thomson Reuters. Excluding drugstore operators, which get two-thirds of revenue from prescriptions, that gain is estimated at 2.3 percent.
Gap (GPS) will report its November sales after U.S. markets close.
Retailers have been contending with low consumer confidence and the need to prod shoppers with bargains this holiday season, which has six fewer days because of a late Thanksgiving.
The National Retail Federation on Sunday said U.S. shoppers had spent 2.9 percent less this year over the Thanksgiving weekend, the kickoff to the holiday season.
The Conference Board, an industry group, said last week that U.S. consumer confidence fell in November after a sharp drop in October as Americans worried about their future jobs and earnings prospects.
Earlier this week, %VIRTUAL-article-sponsoredlinks%J.C. Penney (JCP) reported a 10.1 percent comparable sales increase, partially reversing a disastrous decline in 2012, but the department store chain had to resort to aggressive bargains. The "environment will remain as competitive" through the holiday season, Chief Executive Officer Myron Ullman said.
In a sign of how hard retailers are pushing for sales this holiday season, rival Kohl's (KSS) said Thursday that its stores would be open around the clock between Dec. 20 and Christmas Eve.
Walgreen (WAG) said a "meaningful" increase in promotions had brought in more shoppers, helping the drugstore chain post a 1.9 percent increase in comparable sales of general merchandise.
Dollar General (DG) on Thursday said its same-store sales last quarter rose 4.4 percent, reflecting how much customers are looking to save money.
Stein Mart (SMRT), an off-price chain that sells clothes and home goods at deep discounts, was one of the few retailers to report stronger-than-expected sales for November.
Fred's (FRED), a general merchandise chain, said comparable sales were unchanged, below expectations.
Rite Aid (RAD) said comparable sales of general merchandise at its drugstores rose only 0.4 percent.
Sales were also flat at Cato (CATO), a chain of low-priced clothing. "We continue to expect that the remainder of the holiday shopping season and fourth quarter will be difficult," said CEO John Cato.
Teen retailer The Buckle (BKE) reported a 0.6 percent decline in same-store sales.
On Wednesday, Aeropostale (ARO) forecast a much bigger-than-expected loss for the holiday quarter and said it expected the "heavily promotional environment in the teen retail sector to continue."