(Corrected to remove incorrect reference in 17th paragraph to
Wet Seal's sales missing expectations)
* Jan retail sales were seen up 2.5 pct-Thomson Reuters
* Macy's, American Eagle raise Q4 forecasts
* Target misses estimates, sees tough 2010
* Macy's shares up 5.1 pct, Target down 2.7 pct
(Adds details on Macy's, Target; adds byline, SAN FRANCISCO
By Nicole Maestri and Michele Gershberg
SAN FRANCISCO/NEW YORK, Feb 4 January sales at
top U.S. retailers moved into positive territory from last
year's decline as many chains avoided drastic clearance sales
and shoppers redeemed holiday gift cards.
Many retailers reported sales that beat Wall Street
estimates, and Macy's Inc's (M.N) and American Eagle Outfitters
Inc (AEO.N) raised earnings forecasts. Bon-Ton Stores Inc
(BONT.O) said its quarterly earnings would be at or near the
high end of its outlook.
But Target Corp (TGT.N), the No. 2 U.S. discount retailer,
posted disappointing sales and said it was prepared for a
challenging environment in 2010.
Shares of Macy's rose 5.1 percent in premarket trading, and
American Eagle was up 1.3 percent, while Target fell 2.7
Analysts on average had expected sales at stores open at
least one year to rise 2.5 percent for the month, according to
Thomson Reuters data, rebounding from a 5.7 percent drop in
According to a preliminary tally of 21 retailers tracked by
Thomson Reuters, 13 retailers beat estimates, while six came in
below forecast. An additional nine chains were due to report.
The figures could mark the fifth consecutive monthly sales
increase after a year's worth of declines during the recession,
as consumers slowly return to spending and retailers lower
prices to match a more circumspect shopper.
December same-store sales rose a stronger-than-expected 2.9
percent, helped by a late holiday shopping surge.
January is seen as the least important month of the holiday
fourth quarter, accounting for the smallest portion of its
sales. But with retailers avoiding the drastic clearance sales
that hurt January sales a year ago and consumers cashing in on
gift cards received in December, analysts expected some
companies to raise their earnings forecasts.
SIGNAL FOR THE QUARTER
Retailers' comments about sales trends -- especially
whether traffic weakened significantly at the end of January --
may signal how consumers will spend this quarter.
Some analysts worry that stronger-than-expected holiday
sales pulled spending forward so that retailers could have a
hard time luring shoppers in the first quarter, especially if
cold weather crimps demand for spring merchandise.
Macy's Chief Executive Officer Terry Lundgren, speaking on
cable business channel CNBC, said he was not expecting
employment growth for 2010, but he saw an improved environment
Macy's January same-store sales rose 3.4 percent, beating
estimates for a flat month. The company said it benefited from
its strategy to tailor merchandise locally at its namesake
stores and strong performance at the upscale Bloomingdale's
Macy's now expects to earn $1.35 to $1.37 per share,
excluding restructuring-related costs, in the fourth quarter,
up from its prior view of $1.14 to $1.18. Analysts were
Costco Wholesale Corp (COST.O) said same-store sales rose 8
percent in January, better than the 7.8 percent increase
expected by analysts, according to Thomson Reuters. The
wholesale club benefited from a 25 percent jump at its
international divisions. [ID:nSGE6130CC]
Same-store sales at Limited Brands LTD.N rose 6 percent,
topping a Wall Street view for a 0.5 percent increase.
But apparel retailers Hot Topic HOTT.O posted a decline
that was worse than forecast.
At Hot Topic, January same-store sales fell 13.1 percent,
missing Wall Street estimates for the third straight month. The
teen clothing retailer also said it expected fourth-quarter
earnings to be at the low end of its previous outlook of 18
cents to 20 cents a share.
Sales at Hot Topic, which sells rock 'n' roll-inspired
clothing as well as music and accessories, have weakened in the
absence of new must-have products like its hugely popular
"Twilight" merchandise. [ID:nSGE6120M3]
By category, analysts expected the worst performance to be
from teen and children's apparel retailers, with sales forecast
to decline 0.8 percent. That would represent its 19th
consecutive drop, according to Thomson Reuters data.
(Reporting by Nicole Maestri in San Francisco, Michele
Gershberg, Martinne Geller, Phil Wahba and Dhanya Skariachan in
New York, Jessica Wohl in Chicago; Editing by Lisa Von Ahn)