--Big retailers cite impacts from storm
--Generally say Thanksgiving weekend strong
--Shares fall
(Adds results from more retailers and quote from analyst.)
By Karen Talley
Hurricane Sandy weighed heavily on November sales for retailers
and a burst of end-of-the-month holiday buying that included Black
Friday couldn't overcome the damage, electric outages and gasoline
shortages left in Sandy's wake.
Retailers lost days of business as their stores in the
Northeast--the most populous part of the country--were closed and
saw little business in the period after as residents tried to
recover from the storm. Target Corp. (TGT), Macy's Inc. (M) and
Kohl's Corp. (KSS) are among retailers that saw their same-store
sales fall for the month.
"Sandy had a big impact on a very important part of the
country," said Nancy Liu, retail strategist at Kurt Salmon. "The
region drives so much of consumer spending and commerce. But the
distraction of Sandy in November may mean there will be some
momentum in December from pent up demand."
Macy's marked a 0.7% decline in November same-store sales, the
first time it had shown a drop in three years, and when a 1.5% rise
was expected. "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,"
CEO Terry Lundgren said. Macy's did reiterate guidance for current
quarter earnings and same-store sales. "Going forward into the
heart of the holiday season, we continue to be very enthusiastic
about how our omnichannel strategy is playing out," an approach
that aims to provide a seamless shopping experience whether
customers are shopping in stores, online, through mobile devices or
a combination of the three, he said.
Target, also heavy with Northeast stores, saw comparable store
sales fall 1%, missing consensus estimates for a 2.1% rise.
Comparable-store sales were weakest in portions of the Northeast
and strongest in portions of the South, the mass merchant said.
"November sales were below our expectations, reflecting
weaker-than-planned sales performance in the first two weeks
combined with stronger sales growth across all channels later in
the month," said Chief Executive Gregg Steinhafel, noting that
profitability for the month "remained on plan."
Kohl's Corp. posted a 5.6% decline in same-store sales when 1.9%
growth was expected. All regions reported negative sales for the
month, with the Mid-Atlantic and Northeast "the most challenging"
due to weak sales early in the month following superstorm Sandy,
the company said.
Investors reacted by selling shares, with Kohl's down 11%,
Macy's down 2.5% and Target off 1.7% recently.
The 17 retailers that report same-store sales, or sales at
stores open more than a year, posted a 1.6% rise in same-store
sales, missing the 3.3% growth expected, according to analysts
tracked by Thomson Reuters. The figure doesn't include drug stores.
The results are through Saturday, which is when retailers closed
their books for November and compare with a 3.5% gain a year
ago.
Total Thanksgiving weekend spending reached an estimated $59.1
billion, a 13% increase from a year ago, according to the National
Retail Federation. The number covers Thursday, Black Friday,
Saturday and planned spending on Sunday. Merchants with a strong
Web presence were winners. Online spending from Thanksgiving
through Saturday was $2.4 billion, according to the data-analysis
firm comScore Inc. While the sales were stout, retailers found it
hard to make up for business lost to the mega storm.
The upper end wasn't spared. Nordstrom Inc. (JWN) posted a 1.1%
drop in same-store sales when 4.3% growth was expected. Sales were
hit by store closings in the Northeast and Mid-Atlantic regions due
to Hurricane Sandy, but trends in the second half of the month
rebounded to their recent levels, the company said.
Gap Inc. (GPS) posted a 3% rise in same-store sales when 3.9%
was expected. The retailer made no mention of Hurricane Sandy, but
Gap has many stores in that part of the country. Chief Executive
Glenn Murphy said: "As we head into the thick of the holiday
selling season, we're confident and ready to compete across all our
brands and channels."
Costco Wholesale Corp. (COST), which has a good amount of stores
in the Northeast, but also has recovery supplies, posted a gain of
6% in U.S. sales minus gasoline. Analysts expected 4.8%. The
retailer said its sales for the month were hurt by half a
percentage point because of the storm.
Limited Brands Inc. (LTD) regained some of its momentum after
coming up short of analysts' expectations in October, posting a 5%
rise in same-store sales, when 3.1% was expected. The company said
Victoria's Secret and Bath & Body Works had record setting
Thanksgiving weekends, though superstorm Sandy negatively impacted
the company's total November comparable sales by about one or two
percentage points.
Smaller-town department-store Stage Stores Inc. (SSI) was a rare
big winner. Same-store sales jump 13% in November, when analysts
were expecting 3%. Growth last week topped 20%, said Chief
Executive Michael Glazer, adding, "Our strategy worked well as we
achieved higher sales while maintaining our merchandise margin
rate." The Northeast represents just 3% of total sales.
--Anna Prior contributed to this article
Write to Karen Talley at karen.talley@dowjones.com
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