By Phil Wahba
NEW YORK Dec 5 Several major U.S. retailers
posted disappointing sales for November after shoppers remained
cautious about spending, the latest sign that the holiday season
is shaping up to be the toughest in years.
Some companies that reported sales gains had to offer more
bargains to attract shoppers.
The need to keep discounting, which stems from sagging
consumer confidence and shoppers trained to wait for bargains,
will persist through the remainder of the season, said Edward
Jones analyst Brian Yarbrough.
"Retailers have created this expectation," Yarbrough said,
noting that he is getting more and more promotional e-mails from
Costco Wholesale Corp said sales at stores open at
least a year rose 2 percent, below the 3.3 percent increase
analysts were looking for, according to Thomson Reuters.
Business suffered from a drop in consumer electronics sales.
Costco shares were down 1.9 percent in morning trading. The
Standard & Poor's 500 Retail Index was unchanged, and
the broad S&P 500 fell 0.3 percent.
A same-store sales drop of 5.5 percent at L Brands Inc
, owner of the Victoria's Secret lingerie chain, was far
steeper than the 1.1 percent decline analysts were projecting.
This was the first time the company missed estimates since the
L Brands said an increase in promotions last month had hit
its gross margin. Its shares fell 1.3 percent.
Dollar General Corp, which does not report monthly
sales, said its same-store sales last quarter rose 4.4 percent.
The gain, one of the biggest among large retailers, reflected
how much customers are looking to save money.
Wall Street analysts are expecting 11 top retailers to
report a 2.7 percent increase in same-store sales for November,
according to Thomson Reuters. Excluding drugstore operators,
which get two-thirds of revenue from prescriptions, that gain is
estimated at 2.3 percent.
HOLIDAYS 'WILL BE DIFFICULT'
Retailers have been contending with low consumer confidence
and the need to prod shoppers with bargains this holiday season,
which has six fewer days because of a late Thanksgiving.
The National Retail Federation on Sunday said U.S. shoppers
had spent 2.9 percent less this year over the Thanksgiving
weekend, the kickoff to the holiday season.
The Conference Board, an industry group, said last week that
U.S. consumer confidence fell in November after a sharp drop in
October as Americans worried about their future jobs and
Earlier this week, J.C. Penney Co Inc reported a
10.1 percent comparable sales increase, partially reversing a
disastrous decline in 2012, but the department store chain had
to resort to aggressive bargains. The "environment will remain
as competitive" through the holiday season, Chief Executive
Officer Myron Ullman said.
In a sign of how hard retailers are pushing for sales this
holiday season, rival Kohl's Corp said Thursday that its
stores would be open around the clock between Dec. 20 and
Walgreen Co said a "meaningful" increase in
promotions had brought in more shoppers, helping the drugstore
chain post a 1.9 percent rise in comparable sales of general
Stein Mart Inc, an off-price chain that sells
clothes and home goods at deep discounts, and apparel retailer
Gap Inc were the only retailers in the Thomson Reuters
index to report stronger-than-expected sales for November.
Fred's Inc, a general merchandise chain, said
comparable sales were unchanged, below expectations.
Rite Aid Corp said comparable sales of general
merchandise at its drugstores rose only 0.4 percent.
Sales were also flat at Cato Corp, a chain of
low-priced clothing. "We continue to expect that the remainder
of the holiday shopping season and fourth quarter will be
difficult," said CEO John Cato.
Teen retailer Buckle Inc said same-store sales fell
0.6 percent, while smaller rival Zumiez Inc reported a
weaker-than-expected 1.7 percent rise.
On Wednesday, Aeropostale Inc forecast a much
bigger-than-expected loss for the holiday quarter and said it
expected the "heavily promotional environment in the teen retail
sector to continue."