Warm weather dampens retail sales
NEW YORK (Reuters) - Most U.S. retailers reported dismal September sales that missed Wall Street's expectations, hurt by unusually warm weather, prompting some to cut their outlook for the entire quarter.
"The weather had a great deal to do with what happened. Who wants to buy a heavy coat when the temperature outside is 100 degrees (Fahrenheit)?" said Kurt Barnard, president of Barnard's Retail Consulting Group.
The unseasonal warmth, Barnard said, had reached across the entire retail spectrum.
Much of the eastern two-thirds of the United States was 2 to 6 degrees warmer than normal in September, which was the eighth-warmest since 1895, weather tracking firm Planalytics said.
That hurt several apparel companies which focus on seasonal items, as a lower number of consumers shopped, and those who did postponed buying items such as sweaters, scarves and coats.
Last September was the 15th-coldest recorded, according to Planalytics, adding to tough year-over-year comparisons.
Industry leader Wal-Mart Stores Inc (WMT.N), despite raising guidance for the full quarter on improved margins and lowered expenses, said on Thursday its same-store sales, up 1.4 percent, was still at the low end of its expectations.
No. 2 U.S. discounter Target Corp (TGT.N), which also reported disappointing sales on Thursday, said full-year earnings would be lower than previously expected.
September sales at 49 U.S. retailers rose a combined 1.7 percent, according to the International Council of Shopping Centers, below its most recent forecast of about 2 percent.
The overall sales results, experts said, indicated that the looming holiday season would be highly promotional and competitive for most retailers.
Though discounters like Wal-Mart and Target missed analysts' sales estimates, they could fare well in the holiday period, said Barnard.
"Chances are (consumers) are going to sidestep very expensive items in favor of merchandise that is more available at reasonable prices," he said.
Sales at Wal-Mart's supercenters could be a bright spot in the holiday season, as lower-income consumers consolidate their shopping trips to one-stop stores, said Frank Badillo, senior retail economist at TNS Retail Forward.
The Standard & Poor's Retail Index .RLX fell 1.33 percent in late-afternoon trading.
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