* Top retail chains report Nov. same-store sales Dec. 2-3
* Same-store sales seen up 2.3 pct-Thomson Reuters data
* ICSC sees Nov. sales up 3-4 pct; prior view up 4-6 pct
* Investors seek clarity on start of holiday shopping
* Sales vs profits to be in focus
(Adds updated Thomson Reuters sales forecast figures)
By Nicole Maestri
SAN FRANCISCO, Dec 1 When U.S retail chains
report November sales this week, investors will learn whether
they have gone far enough to protect profits against a weak
start to the holiday shopping season.
Early data on weekend shopping from U.S. Thanksgiving Day
on Thursday through Sunday showed a slight increase in retail
sales, pressuring shares from Wal-Mart Stores Inc (WMT.N) to
J.C. Penney Co Inc (JCP.N) and Saks Inc SKS.N.
To get a clearer picture of how holiday sales are faring,
analysts said they are waiting for retailers to release their
own sales figures on Wednesday and Thursday.
"This November, (same-store) sales are going to be
incredibly important to gauge the state of consumer spending,
and thus fourth-quarter earnings and stock trajectory, and it's
also an important statement about the economic recovery," said
Deutsche Bank analyst Bill Dreher.
Last November, same-stores sales fell 7.8 percent, the
worst decline since Thomson Reuters began tracking such figures
in 2000. Shoppers, panicked by a financial crisis that wiped
out retirement accounts and credit limits, slammed shut their
wallets. Retailers were forced to slash prices, undermining
profits in the year-end fourth quarter.
This year, analysts got more bullish on prospects for
November as customer traffic picked up closer to Thanksgiving
Day on Nov. 26, according to Jharonne Martis, director of
consumer research for Thomson Reuters.
Ahead of Black Friday, the day after Thanksgiving when
retailers offer eye-popping deals, November same-store sales
were expected to rise 1.8 percent.
By Friday, Wall Street had become more bullish and analysts
polled by Thomson Reuters expected same-store sales to rise 2.5
percent. But with early data from the weekend now trickling in,
estimates have moderated. November same-store sales are now
forecast to rise 2.3 percent, according to Thomson Reuters.
The International Council of Shopping Centers has also
tempered its view. On Tuesday it forecast November same-store
sales would show a rise of 3 percent to 4 percent -- down from
its view last week that sales would rise 4 percent to 6
percent. It sees more holiday shopping shifting into December.
The ICSC said electronics and online sales were the big
winners at the start of the holiday shopping season.
But while many large retailers including Costco Wholesale
Corp (COST.O), Target Corp (TGT.N) and Kohl's Corp (KSS.N) will
release sales figures on Thursday, the data will lack results
from key holiday retailers -- including Wal-Mart, Best Buy Co
Inc (BBY.N) and Amazon.com Inc (AMZN.O).
SEEKING CLARITY ON THE TOP LINE
Data released over the weekend pointed to a muted sales
start for the holidays. ShopperTrak said sales rose 0.5 percent
on Black Friday. The National Retail Federation, the trade
group for the retail industry, said customer traffic hit record
levels, but consumers spent nearly 8 percent less on average on
deals like $3 coffeemakers at Target or $10 toys at Walmart.
The traffic surge was welcomed by retailers.
"With November starting off slow, the month's sales results
have grown increasingly dependent on Black Friday (and
Saturday)," wrote Credit Suisse analyst Michael Exstein, in a
note on Monday. "A recovery towards the end of the month is not
an unlikely scenario given retailers' aggressive marketing
He said November, which marks the start of the fiscal
fourth quarter, is an especially important month for department
stores. It accounts for the second-largest monthly sales volume
of the year behind December, he said.
Department stores are being aggressive to lure customers.
J.C. Penney opened at 4 a.m. on Black Friday, while Macy's Inc
(M.N) said it would focus on taking market share by offering
discounts during the holidays. [ID:nN27268627]
Department stores' November same-store sales are expected
to fall 2.7 percent versus a 13.4 percent drop last year.
Discounters should fare better. Their November same-store
sales are expected to rise 4 percent compared with last year's
6.8 percent drop, according to Thomson Reuters data.
Exstein said gasoline prices rose from $2.55 per gallon in
October to $2.65 in November, which should benefit sales
results at warehouse club operators like Costco, BJ's Wholesale
Club Inc BJ.N, and Wal-Mart's Sam's Club's that operate
Tom Stemberg, managing general partner at Highland Consumer
Fund and the founder of Staples Inc (SPLS.O), said most
retailers lose money on their Black Friday specials. But he
said many retailers protected profits this year by cutting
"You will not have the tremendous clearance activity that
you had last year," he said.
But Brian Tunick, who covers specialty apparel retailers
for J.P. Morgan, said some retailers, including Children's
Place Retail Stores Inc (PLCE.O) and Limited Brands IncLTD.N,
may have sacrificed margins to drive traffic into their
Eric Beder, who covers apparel retailers at Brean Murray,
Carret & Co, said the Black Friday weekend might not have been
strong enough to save the month.
He said November sales results and a fourth-quarter
forecast from American Eagle Outfitters Inc (AEO.N) could
disappoint. But he expects Aeropostale Inc ARO.N to give an
upbeat forecast for the fourth quarter when it posts
third-quarter results on Wednesday.
"I think the profit picture (overall) is going to be much
brighter than the sales picture," he said.
(Additional reporting by Brad Dorfman in Chicago; editing by
Gerald E. McCormick and John Wallace)