Feb 7 Several U.S. retailers reported mixed
January sales results on Thursday, as consumers faced a hit to
their take-home pay from higher payroll taxes, while cold
weather may have helped spur purchases of winter clothes.
Costco Wholesale Corp said January sales at stores
open at least a year, or same-store sales, rose 4 percent,
slightly ahead of Wall Street projections for a 3.9 percent
Limited Brands Inc breezed past expectations, buoyed
by its Victoria's Secret stores and a major improvement at its
struggling La Senza chain.
Other retailers reporting stronger-than-expected sales were
the teen-oriented Zumiez Inc, which raised its profit
forecast, and department store chain Stage Stores Inc.
Overall, analysts expect 3.5 percent same-store sales growth
for January across 18 retailers, excluding drugstore chains
Walgreen Co and Rite-Aid Corp, according to
Thomson Reuters I/B/E/S. That would be down from 4.4 percent
growth in January 2012.
U.S. consumer sentiment improved in January as Americans
felt Washington's deal to avert the "fiscal cliff" at the
beginning of the month boded well for the economy, a survey
released last week showed.
But at the same time, tens of millions of Americans saw
their take home pay fall because of a 2-percentage-point
increase in payroll taxes.
Cato Corp, a specialty retailer offering low-price
fashion, reported a 12 percent drop in same-store sales, and
Chief Executive Officer John Cato pinned part of the blame on
the payroll tax. Cato lowered its profit forecast.
Department store operator Bon-Ton Stores Inc as
well as teen chains Buckle Inc and Wet Seal Inc
also reported disappointing sales.
Other chains to report January sales later on Thursday
include Macy's Inc, Target Corp and Nordstrom Inc
The index offers only a glimpse of retail spending as major
chains like Wal-Mart Stores Inc, Sears Holdings
and Best Buy Co Inc do not report monthly sales.
The colder midmonth weather in the eastern half of the
country probably helped many retailers. January is a small month
for retail sales, and retailers' profits are exposed to how much
discounting they have to do to clear shelves to put in spring
"We think cold weather has helped clear winter apparel,"
Morgan Stanley analyst Lauren Bellmare wrote in a note this
week, and said there were generally lower levels of discounting
at mall-based stores.