Retailers report weak sales gains for November

Published on NewsOK Modified: November 29, 2012 at 3:14 pm •  Published: November 29, 2012
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Michael P. Niemira, chief economist at the International Council of Shopping Centers trade group, said he's still sticking with his forecast for a 3 percent increase in sales for the holiday season. Originally, Niemira had expected November would be stronger than December, but now he anticipates the trend will be flipped.

"It's a very challenging season given the hurricane effects," Niemira said. "You're counting on a very strong finish."

Kohl's Corp. certainly is hoping for a stronger finish to the holiday shopping season. Kohl's revenue at stores open at least a year fell 5.6 percent in November. Analysts surveyed by Thomson Reuters had expected revenue to rise 1.9 percent. The weakest regions were the Mid-Atlantic and Northeast, which were impacted by Superstorm Sandy, but Kohl's said all regions reported negative sales for the month.

Kevin Mansell, Kohl's CEO noted that results improved over Thanksgiving week and that Black Friday-related sales seemed to shift to online. Online sales for Thanksgiving week rose more than 50 percent, but most of these sales will be reported with December results, Mansell said.

Meanwhile, department store chains Macy's and Nordstrom Inc. reported their first monthly sales drops since late 2009 when the U.S. economy was just coming out of the Great Recession.

Nordstrom recorded a 1.1 percent decline in November, blaming the weakness not only on Sandy but also on tepid customer response to its semi-annual sales in the first half of the month. Nordstrom also said customers continue to prefer fashion and newness over bargains, which has made its clearance sales less enticing. The November figure was Nodstrom's first monthly decline since September 2009 when it had a 2.4 percent drop.

Macy's revenue at stores open at least a year fell 0.7 percent in November, compared with the 1.5 percent increase analysts expected. It was Macy's first monthly sales drop since November 2009 when it recorded a 6.1 percent decline.

"Despite the largest-volume Thanksgiving weekend in our company's history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy," said Terry J. Lundgren, Macy's CEO.

Perhaps most surprisingly, Target reported that revenue at stores opened at least a year fell 1 percent, well below the 2.1 percent increase that Wall Street was anticipating.

Target said weak sales early in the month offset stronger sales later on. The South was its strongest region, while the Northeast, hard hit by Sandy, was weaker. Still, it said during a pre-recorded conference call that its profitability for the month remained "on plan."

Analysts were puzzled by Target's disappointing sales performance in November. Earlier this month, the no. 2 discounter behind Wal-Mart had issued a profit outlook for the holiday quarter that beat analysts' estimates. The chain also opened its doors at 9 p.m. on Thanksgiving, three hours earlier than a year ago.

Given the tough spending climate, Brian Sozzi, chief equities analyst at NBG Productions, said: "Not everyone is going to win."

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AP Writer Juan Carlos Llorca contributed to this report from El Paso, Tex.

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