Discounters and department stores turn in mixed results for December
NEW YORK — The nation’s discounters and department store retailers turned in mixed results for December, with many chains citing unseasonably warm weather that sapped demand for cold-weather merchandise.
“Cold-weather categories, which are highly profitable and represent approximately 25% of our business in December, were down mid-teens on a percentage basis,” said Tony Buccina, vice chairman, president – merchandising, The Bon-Ton Stores, whose December same-store sales fell 0.7%. The company widened its loss forecast.
In the department store and discount store sector, Costco Wholesale Club, Target Corp., and Kohl’s Corp. were among the chains that missed expectations, while Macy’s Inc. Nordstrom and TJX Cos. all did better than was expected.
At Macy’s, same-store sales rose 6.2%. The company is raising its earnings outlook for the fourth quarter and full year due to a strong holiday season and will double its quarterly dividend to 20 cents a share. Macy’s is also increasing its share repurchase program by $1 billion.
Nordstrom said its same-store sales jumped 8.7% for the five weeks ended Dec. 31, easily topping Wall Street predictions for a 5.1% increase.
The company said the strongest regions were the South and Midwest, and that sales were particularly strong during the first week of the period, and the last two weeks of the period.
Meanwhile, The TJX Cos. announced a two-for-one stock split on the heels of a better-than-expected 8% increase in same-store sales for December. The chain noted that it made a strategic decision to clear cold weather apparel in the unseasonably warm winter.
“We enter January with very lean inventories and the flexibility to ship fresh merchandise with great values to our stores. As we look further out into next year, we believe we are very well positioned to continue to post strong sales and margins,” said Carol Meyrowitz, CEO, The TJX Cos.
Kohl’s said its December same-store sales fell 0.1%, missing the estimate for an increase of 2.2%. The chain said it would miss Wall Street's fourth-quarter profit projection because of weak holiday sales.
JCPenney reported that its December same-store sales grew 0.3%, while total sales for the month fell 2.3%. Analysts had expected the chain’s same-store sales to fall 0.1% in December. J.C. Penney said it would report a fourth-quarter loss of 30 cents to 45 cents a share. The company said the loss would include 50 cents to 55 cents a share in restructuring and management transition charges.
For the month, children's apparel and women's accessories were the top performing merchandise divisions. While overall sales and traffic were softer than anticipated, JCPenney said better trends in its stores during the week leading up to Christmas and increases in traffic and orders on jcp.com during the key holiday shopping periods of the week after Thanksgiving and the week before Christmas.
Costco’s same-store sales rose 7% in December, below analysts’ projections for a 7.6% increase. The same-store sales reflected increases of 7% in the United States and 9% internationally. Excluding fuel, total comps were still up 7%, but were up 6% in the United States and 11% internationally.