(Adds Gap sales, final sales tally and updates share prices)
By Phil Wahba
Nov 7 Costco Wholesale Corp and
Victoria's Secret parent L Brands Inc were among the
major U.S. retailers to report same-store sales gains for
October, but many chains expressed caution heading into the
Consumer confidence has dipped, in part because of slow
employment growth, and shoppers have gravitated toward bargains
in recent months.
A group of nine U.S. retailers reported an overall 3.7
percent increase in sales at stores open at least a year, better
than analysts' forecasts of 2 percent, according to Thomson
Apparel chain Gap Inc's October same-store sales
rose 4 percent, well ahead of the analysts' average estimate of
0.1 percent and its shares rose in after-hours trading.
The Standard & Poor's Retail Index closed down
about 2 percent on Thursday, while the broad S&P 500 stock index
fell 1.3 percent.
Costco reported a slightly bigger-than-expected 3 percent
gain in same-store sales. Fresh food was among its best-selling
products, and the weakest category was consumer electronics.
L. Brands said its same-store sales were up 8 percent, well
above the 2.2 percent gain Wall Street analysts were expecting,
according to Thomson Reuters.
The 16-day U.S. government shutdown at the start of the
month weighed on consumer confidence and slowed job growth. U.S.
job growth probably slowed sharply in October, with the
unemployment rate ticking higher, according a Reuters survey of
economists published this week.
The International Council of Shopping Centers is forecasting
same-store sales will rise 3 percent to 4 percent in November,
in part because the shutdown has ended, eliminating one source
of consumer anxiety, Chief Economist Michael Niemira said. But
the trade group still expects only modest growth this holiday
Many retailers noted worrisome patterns as retailers head
into the holiday season.
Drugstore chains Walgreen Co and Rite Aid Corp
reported softer sales of general merchandise and slower
shopper traffic, continuing a trend many companies have noted in
Fred's Inc said more shoppers made greater use of
its layaway program. Lower-income customers typically use such
programs, paying for goods in installments before picking them
J.C. Penney Co Inc, which is not in the same-store
sales index, reported its first monthly increase in nearly two
years, but deep discounting had a lot to do with that.
"We expect the holiday season to be extremely competitive,"
Penney Chief Executive Officer Myron Ullman said in a statement.
Cool weather helped some retailers, such as low-priced
clothing chain Cato Corp, as shoppers replenished their
But Cato also said it expected a tough holiday quarter, as
did teen chain Abercrombie & Fitch Co.
The Buckle and Zumiez Inc, which also cater
to teens, reported only modest same-store sales gains for
Morgan Stanley last week issued a research note forecasting
the weakest holiday season since 2008, when the financial crisis
decimated retail sales.
Perfume maker Coty Inc, whose U.S. customers
include Wal-Mart Stores Inc and Target Corp,
said on Thursday that some of its large retail clients in the
mass market had cut back on orders.
(Reporting by Phil Wahba in New York; Editing by Lisa Von Ahn,