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Associated PressEarly numbers suggested a bad holiday season for stores, but a late-season spree helps make totals respectable.
NEW YORK - Consumers who frustrated retailers through the early part of December gave many storeowners a respectable holiday season after all, coming through at the last minute with a spending spree right before and after Christmas. Even struggling department stores ended up with solid results.
December sales figures issued Thursday by the nation's biggest retailers showed that procrastinators and post-Christmas shoppers helped Wal-Mart Stores Inc., J.C. Penney Co. Inc. and Target Corp., among others, offset a slow start to the season.
Still, the end-of-the-season sales surge didn't benefit all retailers; Gap Inc. and Kohl's Corp. were among those dissatisfied with their results.
And some retailers got their sales with heavy markdowns that eroded their profits. Wal-Mart warned Thursday that fourth-quarter earnings may fall at the low end of projections.
Upscale stores including Neiman Marcus Group and Nordstrom Inc. were the star performers, posting sales results that far exceeded expectations. And December turned out to be a pleasant surprise for May Department Stores Co., Federated Department Stores Inc. and many mall-based apparel stores including Limited Brands. Sears, Roebuck and Co. reported sluggish results, but they surpassed Wall Street forecasts.
"I was pleasantly surprised. The numbers were strong across the board," said Ken Perkins, research analyst at Thomson First Call, whose tally of 82 stores' sales was up 4.2 percent last month.
The tally is based on what the industry calls same-store sales, those from stores open at least a year. They are considered the best measure of a retailer's health.
"Industrywide, the last two weeks made up a lot of lost ground," said Michael P. Niemira, chief economist at the International Council of Shopping Centers. "There was a lot of worry, but in the end, sales came through."
The International Council of Shopping Centers-UBS same-store sales tally of 77 retailers was also up 4.2 percent, in line with Niemira's 4 percent forecast.
That means same-store sales for the November-December period rose 4.0 percent from a year ago, confirming Niemira's prediction that holiday 2003 would be the best since 1999's 5.4 percent. The 2002 season had a meager 0.5 percent gain in same-store sales from the previous year.
When the 2003 season started, many stores hoped for bigger increases because of the rebounding economy. That didn't happen. After a slow start caused in part by northeastern snowstorms, retailers warned that the season might be disappointing, and many analysts lowered their forecasts. So stores were depending even more heavily on the final days before Christmas and postholiday shopping to meet their goals.
The sluggish job market made many consumers wary, and many held off buying until they got the markdowns they wanted.
Wal-Mart said December same-store sales were up 4.3 percent, beating analysts' expectations of 3.3 percent. Penney said same-store sales for its department store business rose 4.3 percent, exceeding the 1.3 percent estimate of analysts surveyed by Thomson First Call. Target Corp., said same-store sales were up 4.1 percent, beating estimates of 3.4 percent.
Kohl's posted a 1.2 percent decline in same-store sales, in line with analysts' forecasts, but it cut its fourth-quarter earnings outlook. "We are very disappointed," said CEO Larry Montgomery. "The business came very late in the month and at deeper discounts than planned."
At Federated, owner of Burdines, same-store sales rose 1.2 percent, compared to a 0.2 percent forecast. May had a 1.6 percent same-store sales increase. Results beat Wall Street projections of a 1.8 percent decline.
Sears reported that same-store sales fell 0.6 percent in its domestic business.
At Limited Brands, same-store sales rose 6 percent, versus an estimate of 1.3 percent. But Gap reported a 1 percent same-store sales gain, well below the 5.1 percent Wall Street expected.
Luxury retailers were the big pleasers. At Neiman Marcus, same-store sales increased 12.6 percent, while Nordstrom recorded a 9.1 percent gain.
Saks Inc., which operates Saks Fifth Avenue, turned in a 5.1 percent gain.