December sales vary widely for retailers

THE BALTIMORE SUN

CHICAGO - Retailers turned in an uneven December, with warehouse clubs and luxury chains posting impressive gains but department stores and discount merchants showing signs of wear.

Sales at chain stores open at least a year rose 2.7 percent in December, according to a tally of 77 retailers by the International Council of Shopping Centers. That performance fell short of the 3.5 percent to 4 percent sales gain that the trade group predicted.

Still, results at individual retailers varied wildly.

Some did well

"If December's retail sales had to be summed up in a word, that word would be 'uneven' - some did very well, others very poorly," Michael Niemira, chief economist for the shopping centers council, said in his recapitulation.

Wal-Mart Stores Inc. posted a 3 percent rise in December sales, as the world's biggest retailer ended the month on an upswing after getting off to a slow start for the holiday season.

Costco Wholesale Corp. had a 9 percent gain in same-store sales. The nation's biggest warehouse club was expected to post a 6.1 percent increase, according to an analyst poll by RetailMetrics.

Overall, about two-thirds of the 68 retailers tracked by RetailMetrics beat Wall Street's expectations, and 31 percent came up short.

Teen apparel

Besides Sears, Roebuck and Co., whose sales fell 3 percent when analysts expected a slight increase, the retailers posting the biggest shortfalls included Pier 1 Imports Inc., Circuit City Stores Inc. and Limited Brands Inc.'s Express chain.

The most pleasant surprises came at teen apparel retailers, who racked up a 12.5 percent increase in same-store sales. That was well above the 6.3 percent increase that analysts expected for the sector.

One teen standout was American Eagle Outfitters Inc. Analysts expected it to report an 18.8 percent rise in same-store sales, but it did nearly twice that, posting a 32.8 percent gain. American Eagle didn't have to engage in heavy markdowns to generate traffic.

Sales gains last month at Kohl's Corp. and Target Corp. were good but expensive, said Richard Hastings, retail economist for Variant Research Corp., pointing to their earnings warnings yesterday.

Kohl's said it now expects to post fourth-quarter earnings at the low end of its previous forecast. Target cautioned that Wall Street's consensus fourth-quarter earnings estimate of 94 cents a share is too high.

Heavier promotions

The National Retail Federation is to release its final holiday numbers Jan. 13, coinciding with the release of the Commerce Department's sales report. The trade group continues to expect holiday sales, including those of independent retailers, to have risen 4.5 percent, compared with 5.1 percent growth a year ago.

Yesterday, however, the retail federation conceded that most retailers "clearly relied on heavier promotions to help boost holiday sales."

Luxury chains booked a 10 percent increase, the shopping centers council said. Nordstrom Inc.'s 9.3 percent gain was boosted by sales of women's shoes and accessories. Saks Inc. beat analysts' estimates with sales rising 6 percent, boosted by a 12 percent gain at its Saks Fifth Avenue chain.

"For the upper-end consumer it wasn't about price, it was about getting the right gift," said Patricia Edwards, who helps manage about $5.3 billion at Wentworth, Hauser & Violich in Seattle.

The Chicago Tribune is a Tribune Publishing newspaper. Bloomberg News contributed to this article.

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