U.S. Retailers Report Disappointing Sales Results for November

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U.S. retailers today reported disappointing sales results for the month of November despite seeing record sales during the Black Friday weekend. November sales results at major retailers were negatively impacted by Hurricane Sandy.

Although more than two-thirds of retailers missed expectations, the majority of them noted better demand in the second half of November. This suggests that the holiday season is likely to be strong for major retailers despite the disappointing November sales. Overall the 16 retailers tracked by Thomson Reuters reported an increase of 1.6% in same-store sales. This is significantly below the consensus forecast of 3.3%.

Here is a look at how some of the major retailers performed.

Target Corporation (NYSE: TGT): The Minneapolis, Minnesota-based retailer reported net retail sales for the four-week period ended Nov. 24 of $6.183 billion, down 0.1% from the same period in the previous year. Comparable store sales for the four-week period fell 1%, missing Target's own forecast. Analysts were expecting the company to report an increase of 2.1% in comparable store sales for the four-week period.

Target noted that the sales miss was due to weaker-than-planned sales performance in the first two weeks of November. Gregg Steinhafel, Chairman, President and CEO of Target, said that profitability for the month of November remained on plan, reflecting the company’s efforts to balance thoughtful price investments in an intensely competitive environment with its continued focus on driving sales.

Macy’s Inc. (NYSE: M): Another big disappointment was Macy’s, the Cincinnati, Ohio-based retail organization operating under the Macy’s and Bloomingdale’s brand. Macy’s reported total sales of $2.450 billion for the four-week period ended Nov. 24, down 0.6% over the same period in the previous year. The company’s same-store sales for the period fell 0.7%.

Macy’s CEO Terry J. Lundgren said that despite the largest-volume Thanksgiving weekend in its history, the company was not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy. Lundgren, however, is positive that the company can deliver strong sales performance in the fourth quarter, in-line with the company’s guidance. Macy’s continues to expect same-stores for the fourth quarter to increase 4.2%.

Kohl’s Corporation (NYSE: KSS): Macy’s rival, Kohl’s saw its total sales for the four-week period ended Nov. 24 fall 4.9%. The retailer’s comparable store sales for the four-week period fell 5.6%, missing the consensus forecast of an increase of 2.1% in comparable store sales.

CEO Kevin Mansell noted that though November sales were lower than expectations, he is encouraged by the improved sales over the Thanksgiving week. Mansell said that there was a significant shift in Black Friday-related sales into the company’s e-commerce channel and for the week, both transactions and sales in e-commerce increased more than 50% with most of these sales being recognized in December.

Nordstrom Inc. (NYSE: JWN): The Seattle, Washington-based fashion specialty retailer reported a 1.1% drop in same-store sales for the four-week period ended Nov. 24, compared to the consensus forecast of an increase of 4.5%. The company said that its preliminary total retail sales for November 2012 were $926 million, up 1.8% over the same period in the previous year.

Like other retailers, Norstrom also saw weaker sales in the first half of the month. The company said that the weaker sales were largely attributable to lower than planned half-yearly sale for women and kids. JWN noted that customers continue to show a strong preference for fashion and newness and this has made clearance events less compelling. Nordstrom's sales in the first half of the month were also hurt by Hurricane Sandy.

The Gap Inc. (NYSE: GPS): The San Francisco, California-based global specialty apparel company reported net sales of $1.52 billion for the four-week period ended Nov. 24, compared to $1.47 billion reported for the same period in the previous year. GPS’s comparable store sales for the four-week period rose 3%.

Comparable store sales at Gap North America rose 5% in November, while at Banana Republic North America rose 3%. Old Navy North America reported an increase of 1% in November comparable store sales.

CEO Glenn Murphy said that as the company heads into the thick of the holiday season, it is confident and ready to compete across all its brands and channels.

Black Friday Sales Encouraging

While sales at major U.S. retailers fell short of expectations for November, one bright spot was the sales during the Black Friday weekend. All major retailers saw strong sales during the Black Friday weekend, which suggests that the next holiday shopping season will be a strong one. It will be interesting to see whether sales during the rest of the holiday season will be enough to offset the weakness seen in the first two weeks of November. 



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