Last-minute surge helps fuel December sales; Gap shines in apparel sector
New York -- An apparel last-minute surge in holiday shopping helped many key retailers report better-than-expected sales in December. Twenty retailers reported sales in December rose an average of 4.5%, compared with the year-ago period, according to the International Council of Shopping Centers. Costco, Gap, Nordstrom and TJX Cos. were among the best performers.
Overall, Wall Street expected 3.3% overall same-store sales growth for December across the 17 chains that still report monthly comps, down from 4.2% growth in the year-ago period, according to Thomson Reuters. Same-store sales rose a disappointing 1.6% in November.
The holiday season was never expected to be a barn-burner, but “fiscal cliff” headlines, Superstorm Sandy damages and the Sandy Hook tragedy created additional pressure as consumers reacted to the onslaught of bad news.
"The consumers' confidence is off a bit, and I don't think you can point to a single individual thing,” Madison Riley, managing director of retail consulting firm Kurt Salmon, told Reuters. “It's a culmination of things that hit their psyche."
In the specialty apparel category, Limited Brands missed Wall Street’s 4.5% forecasted increase by reporting a 3% rise in December same-store sales. The parent of Victoria’s Secret, Bath & Body Works and namesake stores reported net sales of $1.947 billion for the five weeks ended Dec. 29, 2012, compared with net sales of $1.868 billion last year.
Gap Inc. beat estimates with a 5% rise in December same-store sales, ahead of the 3.5% expected rise. Total sales for the five-week period ended Dec. 29 rose to $2.08 billion from $1.98 billion.
“Customers responded favorably to our product offerings and promotions during the holiday season overall,” said Glenn Murphy, chairman and CEO.
By brand, Gap North America delivered a positive 2% vs. negative 4% last year; Banana Republic North America delivered positive 1% vs. negative 2% last year; and Old Navy North America delivered positive 13% versus negative 4% last year.
One of the weakest performances in the apparel category was turned by the struggling The Wet Seal, whose same-store sales plummeted 9.7%. Analysts forecast the chain would have the weakest sales of any of the 17 chains reporting, but only expected a 5% decline.
In a statement, the retailer said: “December sales were below our expectations, driven mainly by lower than expected transactions throughout the month.”
Among other reporting specialty apparel retailers:
• Zumiez same-store sales in December surged 15%;
• The Buckle edged up 1%;
• Stage Stores rose 2.7%;
• Hot Topic gained 4%; and
• Cato dropped 7% and lowered its fourth quarter guidance.