Posted on 01/09/2003 10:58:47 AM PST by RCW2001
NEW YORK - The already disappointing holiday shopping season turned out to be even more dismal than anyone anticipated. The nation's retailers released weaker than expected sales figures Thursday, confirming that the just-ended season was the worst in decades.
Even usually strong retailers such as Wal-Mart Stores Inc., Kohls Corp. and Target Corp. suffered amid economic uncertainty, a short season and a lack of must-have items.
Department stores and many mall-based apparel stores, particularly Talbots Inc. and AnnTaylor Stores Corp., also languished.
But there were some pleasant surprises: Resurgent Gap Inc. and J.C. Penney Co. Inc. extended their comeback. And teen retailers Hot Topic Inc. and Pacific Sunwear of California Inc. whose results at stores opened at least a year, known as same-store sales, well exceeded Wall Street's expectations.
Same-store sales are considered the best indicator of a retailer's health.
Throughout December, many of the nation's merchants were continually reducing their sales targets and predicting disappointing sales for the season, but Michael P. Niemira, vice president of Bank of Tokyo-Mitsubishi Ltd. was surprised Thursday at how widespread the declines were.
"This certainly can be characterized as a weak season," said Niemira, noting that 51 percent of the 82 stores he tracks registered sales declines in December.
The company's same-store sales tally was up only 1 percent for December, far below his estimate of 2 percent to 2.5 percent.
That means that same-store sales for the combined November and December period, which accounts for almost 25 percent of retailers' annual revenues, rose only 0.5 percent. That confirms that the holiday 2002 season is the weakest since at least 1970, when the index began to track same-stores sales data.
Niemira and other analysts don't believe consumer spending will improve in the short-term.
"I think in the near term, there will be a continuation of a struggle in the retail industry," said Niemira, noting that the possibility of war in Iraq and the nation's shaky economy will remain obstacles this year.
The disappointing news from merchants followed a more upbeat announcement by the Labor Department (news - web sites) that new claims for unemployment benefits dipped last week, a sign that layoffs may be leveling.
For the work week ending, Jan. 4, jobless claims fell by a seasonally adjusted 19,000 to 389,000, the lowest level since Dec. 21. The decline came after new applications for unemployment benefits increased by 19,000 the week before.
Still, analysts say consumers are nervous about their jobs, and consequently will continue to scour stores for the best deal.
"There is still a great deal of conservatism among consumers," said Gregg Clark, vice president of retail at Cap Gemini Ernst & Young.
Gap, whose business started to recover in October following a prolonged slump, did surprisingly well with a 5 percent gain in same-store sales. That beat Wall Street expectations of a 3.6 percent increase.
Total sales were up 10 percent.
Wal-Mart reported same-store sales were up 2.3 percent, below Wall Street's already reduced estimate of a 2.6 percent gain. Last month, Wal-Mart had earlier pulled back from its projection of a same-store sales increase of 3 percent to 5 percent for December.
Total sales were up 9.5 percent. The discounter said inventory is at slightly higher levels than the company would like but is still manageable.
Target said same-store sales were down 0.3 percent, in line with reduced Wall Street expectations for a 0.4 percent decrease. The results were well below Target's original projection of a 3 percent to 5 percent gain.
Total sales at Target were up 7.6 percent.
Kohl's reported a modest 3.3 percent same-store sales gain in December, far below the 6 percent increase Wall Street anticipated. Total sales were up 19.4 percent.
Here are selected same-store sales for December for other leading retailers:
_AnnTaylor, same-store sales were down 14.6 percent; total sales declined 7.8 percent.
_Federated Department Stores Inc., same-store sales slipped 2.6 percent; total sales were down 0.8 percent.
_Hot Topic, same-store sales were up 10.6 percent; total sales increased 36 percent.
_Pacific Sunwear of California, same-store sales gained 16.1 percent; total sales were up 28.7 percent.
_ Penney, same-store sales at department stores were up 4.7 percent; total sales were up 0.6 percent.
_ Limited Brands, same-store sales were unchanged; total sales were up 4 percent.
_ Sears, Roebuck and Co., same-store domestic sales were down 4.6 percent; total sales declined 2.6 percent.
_ Talbots, same-store sales were down 9.1 percent; total sales decreased 3 percent.
None, if your idea of economic analysis is to compare apples and oranges. Figures don't lie, but liars can figure.
Gee and if my best customers for the past five years had done the normal twelve or more projects during the past year instead of one, then my sales would be down only slightly from last year. Instead I had to go out and find new clients that are hurting almost as much. What you dont seem to realize is that those days werent there and so the sales on those days werent there. They were permanently lost. Only positive is that next Christmas almost has to be better by comparison.
Yes, and you are a savy online person. Those bluecollar workers most likely to be hurt by the downturn are not as likely to buy online. Those without a job are last likely to continue to be shopping online since Internet access costs money.
And you are an example of the Economic Illiteracy that Rush is always complaining about. I sure hope you dont manage any money you might have invested in the market.
On a first name basis are you? I should have known.
For weeks the news media has been reporting that sales were up about one percent during Christmas season. That its marginally higher than last year is meaningless. Our economy has grown an average of four or five percent all during the 90's. A one percent increase doesnt cut it.
Also note that the article pointed out that a huge percentage of retailers were showing negative sales in those stores that were open both years. That means all the growth they did report was coming as a result of adding new outlets. Opening new outlets and promoting them is expensive so that means the profitability of the retailers sucks. Its not the absolute level of sales that determine whether a company is hiring or firing or whether its stock price is rising or falling, its the profits. These got squeezed. Those of you that think because the total level of sales is almost the same as last year then this season must be pretty good are looking at this like housewifes and not like economists or financial analysts.
I couldn't agree more. What have I said that makes you think I feel differently?
Well then by your analysis, they must all be idiots running these companies. Adding new outlets is called expansion. Expansion costs money. But companies expand in order to be better positioned for the future. For these companies to expand they must feel that something positive is happening.
I am a Republican. I am a conservative economically. Your statement that sales were UP is based upon the above quote from the article. If the rate of inflation was greater than 0.5% in 2002, then sales in real dollars were down from the prior year.
I don't like it; you don't like it. The media and Democrats will infer all the wrong reasons for it. But neither you, I, nor the administration can deny it.
And another thing. Why do you insist on taking a holier-than-thou attitude with each response? And what exactly do you have against housewifes?
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