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 Some companies that reported sales gains had to offer more bargains
to attract shoppers.
The need to keep discounting, which stems from sagging consumer
confidence and shoppers trained to wait for bargains, will persist
through the remainder of the season, said Edward Jones analyst Brian
Yarbrough.
"Retailers have created this expectation," Yarbrough said, noting
that he is getting more and more promotional e-mails from national
chains.
Costco Wholesale Corp said 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. Business suffered from a drop in
consumer electronics sales.
Costco shares were down 1.9 percent in morning trading. The Standard
& Poor's 500 Retail Index was unchanged, and the broad S&P 500 fell
0.3 percent.
A same-store sales drop of 5.5 percent at L Brands Inc, owner of the
Victoria's Secret lingerie chain, was far steeper than the 1.1
percent decline analysts were projecting. This was the first time
the company missed estimates since the 2009 recession.
L Brands said an increase in promotions last month had hit its gross
margin. Its shares fell 1.3 percent.
Dollar General Corp, which does not report monthly sales, said its
same-store sales last quarter rose 4.4 percent. The gain, one of the
biggest among large retailers, reflected how much customers are
looking to save money.
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.
HOLIDAYS "WILL BE DIFFICULT"
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.
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Earlier this week, J.C. Penney Co Inc 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 Corp said Thursday that its stores would be
open around the clock between December 20 and Christmas Eve.
Walgreen Co said a "meaningful" increase in promotions had brought
in more shoppers, helping the drugstore chain post a 1.9 percent
rise in comparable sales of general merchandise.
Stein Mart Inc, an off-price chain that sells clothes and home goods
at deep discounts, and apparel retailer Gap Inc were the only
retailers in the Thomson Reuters index to report
stronger-than-expected sales for November.
Fred's Inc, a general merchandise chain, said comparable sales were
unchanged, below expectations.
Rite Aid Corp said comparable sales of general merchandise at its
drugstores rose only 0.4 percent.
Sales were also flat at Cato Corp, 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 Buckle Inc said same-store sales fell 0.6 percent,
while smaller rival Zumiez Inc reported a weaker-than-expected 1.7
percent rise.
On Wednesday, Aeropostale Inc 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."
[By Phil Wahba © 2013 Thomson Reuters. All
rights reserved.]
(Reporting by Phil Wahba in New York and Devika Krishna Kumar in
Bangalore; editing by Lisa Von Ahn) Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
