The weak results came from across all retail categories, but particularly hard hit were apparel sellers including Limited Brands Inc. and teen retailer Pacific Sunwear of California Inc. Among the few bright spots was Wal-Mart Stores Inc., which posted results that exceeded Wall Street expectations, as it benefited from shoppers traded down to cheaper stores amid higher gas prices and a slumping housing market.
"It's weaker than expected," said Jharonne Martis, a retail analyst at Thomson Financial. "There's definitely a consumer spending slowdown." But she added that she's waiting to see how sales fare in January, when stores benefit from consumers redeeming their gift cards. Retailers don't record sales of gift cards until they are redeemed.
According to a preliminary sales tally by Thomson Financial, 16 retailers missed projections, while seven beat forecasts and one met expectations. The tally is based on same-store sales or sales at stores opened at least a year which are a key indicator of a retailer's health.
Wal-Mart, the world's largest retailer, posted a 2.4 percent increase in same-store sales, exceeding the 1.8 percent forecast of analysts polled by Thomson Financial. But the discounter said that its fourth-quarter results will be "pressured by higher interest expense" compared to last year.
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Costco Wholesale Corp. reported a 7 percent increase in same-store sales, better than the 5.6 percent estimate.
Limited posted a 8 percent drop in same-store sales, worse than the 4 percent Wall Street expected.
Maternity apparel retailer Mothers Work Inc. reported that same-store sales fell 7.6 percent, worse than the 0.5 percent analyst estimate.
Pacific Sunwear of California posted a 2.8 percent decline in same-store sales, a little bit better than the 3.1 percent forecast.
[Associated Press; By ANNE D'INNOCENZIO]
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