* Same-store sales at Target, Gap, Macy's miss expectations
* Same-store sales at Limited top expectations
* Sandy blamed for some weakness early in the month
* Retail shares underperform broader market
By Jessica Wohl
Nov 29 Weak sales at leading U.S. retailers in
early November dragged down their results for the month as the
effects of major Northeast storms offset brisk activity over the
long Thanksgiving weekend.
Retailers on average reported a 1.6 percent increase in
sales at stores open at least a year, about half the 3.3 percent
rise that analysts had forecast and below a year-earlier gain of
3.5 percent, according to Thomson Reuters I/B/E/S.
Target Corp and Macy's Inc, two of the biggest
companies to report monthly sales on Thursday, missed analysts'
expectations. Both saw weakness at the beginning of November,
when superstorm Sandy and another storm hit the Northeast.
"We would probably have seen just blockbuster numbers had it
not been for Sandy and the nor'easter, the back-to-back storms
in the Northeast," said Alison Paul, U.S. retail and
distribution leader and vice chairman for advisory and
consulting firm Deloitte.
The two storms and resulting massive power outages and
damage "really wiped out a week or two of any retail activity in
the most populated part of the country," she said.
In addition, increased online shopping and layaway sales
hurt November results, said International Council of Shopping
Centers Chief Economist Michael Niemira.
Retailers do not book layaway sales until they are fully
paid for and do not book online sales until the products are
shipped. Niemira expects both layaway and online shopping to
help same-store sales in December.
Wal-Mart Stores Inc's Walmart, Sears Holdings Corp's
Kmart and Toys R Us - none of which report monthly
sales - have been promoting layaway this season.
Cyber Monday, the Monday after Thanksgiving, was reportedly
the biggest online shopping day ever, but came after the
November sales period ended.
Kohl's Corp posted a surprising drop in November
same-store sales, and its shares fell more than 9 percent. It
said strong online sales late in the month would fall largely in
December's sales tally.
Meanwhile, Tiffany & Co lowered its fiscal-year
forecast yet again after quarterly same-store sales fell in Asia
Sales were weak in the company's least expensive category,
silver jewelry, suggesting price-conscious shoppers were
hesitant to spend. Tiffany shares fell more than 6 percent.
The Standard & Poor's 500 retail index was down 0.4
percent on Thursday, while the broader S&P 500 index rose
Sales for the November-December holiday season look set to
rise 4.1 percent to $586.1 billion this year after a 5.6 percent
increase in 2011, according to a National Retail Federation
forecast given weeks before the Northeast storms. Other
forecasts also hover around 4 percent.
During the long Thanksgiving weekend, sales rose 12.8
percent to $59.1 billion, compared with a 16.4 percent jump for
the comparable weekend in 2011, according to an NRF survey.
"I think it's going to be a solid holiday, but we're not
going to break any records," said Madison Riley, managing
director at retail consulting firm Kurt Salmon.
Deloitte still expects a 3.5 percent to 4 percent rise in
holiday sales, Paul said.
The ICSC predicted that December same-store sales would rise
4 percent to 4.5 percent, and expects overall same-store sales
for the November-December period to be up 3 percent.
Discounts reign during the holiday season, with retailers
hoping that customers who come in for deals such as Thanksgiving
weekend "doorbusters" also pick up items that are not heavily
"I think a lot of that consumer activity was focused on the
doorbusters," Riley said. "It may be a bit of a squeeze from a
Big-box chains that offered deals on Thanksgiving night may
have done better than mall-based apparel stores that opened
later, Paul said.
Retailers may need to resort to more discounting next month.
"It appears that December will be highly promotional across
the industry, as many retailers have missed November," said
Janney Capital Markets analyst David Strasser.
Despite the largest-volume Thanksgiving weekend in Macy's
Inc's history, the department store operator was not able to
overcome November's weak start, Chief Executive Officer Terry
Lundgren said in a statement.
Macy's posted an unexpected same-store sales decline, but is
on track for a "very strong" performance in the current, holiday
quarter, Lundgren said. The company's shares fell 2.3 percent.
Target's 1 percent decline in same-store sales stemmed from
weakness in the first two weeks of November, CEO Gregg
Steinhafel said in a statement. Sales picked up later in the
month, and profitability was as planned, Steinhafel added.
Limited Brands Inc said its same-store sales had
risen 5 percent, including a hit of one to two percentage points
from Sandy. Analysts expected just a 3.1 percent increase.
Gap Inc's comparable sales rose less than expected.
However, all of the company's brands did better than last year,
led by a turnaround at Old Navy, which lured shoppers with items
such as $15 jeans and $5 fleece jackets on the day after
Same-store sales at Costco Wholesale Corp, the
biggest chain that issues monthly reports, rose a
better-than-expected 6 percent, the warehouse club chain said on
The overall November results are from 16 retailers and
exclude Zumiez Inc, which is set to report later on