* October same-store sales up 1.8 pct vs view up 2 pct
* Tally shows 52 pct miss, 44 pct beat estimates
* Department stores, teen retailers struggle; shares down
* Holiday forecasts contradictory ahead of Thanksgiving
(Recasts, adds final same-store sales tally, adds comments)
By Nicole Maestri
NEW YORK, Nov 5 More than half of U.S. retail
chains posted October sales that fell short of Wall Street's
heightened expectations, raising doubts about a widespread
recovery for the holiday season.
Department store chains and teen retailers in particular
disappointed investor expectations, while such disparate
companies as apparel retailer Gap (GPS.N) and luxury store
chain Saks Inc SKS.N performed better than hoped as consumers
return to spending selectively.
"October results are not going to give investors the
overall warm and fuzzy that we're on track for a strong
Christmas," said Brean Murray, Carret & Co analyst Eric Beder,
"It looks like we're on track for kind of a mediocre season
right now based upon October."
Retail shares reflected the mixed results. Teen retailers
Aeropostale ARO.N and American Eagle Outfitters (AEO.N) fell
13.6 percent and 12 percent, respectively. Mid-priced
department store J.C. Penney (JCP.N) fell 6.5 percent, and
Kohl's (KSS.N) shed 2.9 percent, while Saks gained 1.8 percent.
For a graphic on retail sales results by category, click on
Industry forecasts for the holiday season range from a
slight decline for retail sales to a slight increase, and many
insiders say it is difficult to reach a firm prediction.
In the most bullish of forecasts to date, the International
Council of Shopping Centers said on Thursday it expects retail
same-store sales to rise 5 percent to 8 percent in November
[ID:nN05113645] It has forecast holiday same-store sales to
rise 1 percent.
However America's Research Group founder Britt Beemer says
total retail sales will most likely fall 2.9 percent during the
season as a whole, according to a forecast issued on Thursday.
"I don't see anything out there that says October was an
exciting month even with retailers advertising 60 percent off,"
2008 A HORRIBLE BENCHMARK
Sales were expected to improve from last year, when
consumers all but stopped spending in the face of a financial
crisis. Analysts had steadily raised their estimates for the
month, buoyed by bullish forecasts from retailers like J Crew
Group JCG.N and Amazon.com (AMZN.O).
Total October same-store sales rose 1.8 percent, below an
estimate for a 2 percent gain, according to Thomson Reuters
data. Fifty-two percent of retailers came in below expectations
while 44 percent beat forecasts.
But it marked the strongest showing since June 2008, when
sales rose 1.9 percent. Last October, same-store sales plunged
"If you show a 2 percent increase over a bad performance,
it's still a bad performance," said Brian Girouard, global
leader of Capgemini's consumer products and retail practice.
"There's good news, but remember the benchmark was horrible."
While sales may be disappointing, analysts said retailers
have slashed inventory to help protect profits.
"The holiday season will be profitable for the retailers,
but the sales might not be significantly different from last
year," Girouard said.
For instance, TJX Cos (TJX.N) posted a 10 percent increase
in same-store sales, narrowly missing analysts' expectations,
but said it now expects per-share earnings for the third
quarter to be at or slightly above its recently raised range of
77 cents to 79 cents.[ID:nWNAB0967]
Aeropostale now expects to earn 90 to 91 cents per share in
the third quarter, up from its prior view of 84 cents to 85
cents per share.[ID:nWNAB0944]
J.C. Penney's same-store sales fell 4.5 percent, worse than
analysts' forecasts for a 2.3 percent drop. But it raised its
view for third-quarter earnings to 10 cents to 11 cents per
share, from a prior view of 3 cents to 10 cents per
(Additional reporting by Brad Dorfman, Benjamin Klayman and
Jessica Wohl in Chicago, Aarthi Sivaraman in Seattle, Martinne
Geller and Dhanya Skariachan in New York; editing by John
Wallace, Dave Zimmerman)