The widespread sanguinity that followed a near-six percent jump in comps for fiscal November has all but faded as many industry chain stores turned in largely disappointing results for a much-anticipated December period. It appears much of the strength exhibited in the front-half of the holiday season led to overestimations as consumers keyed on holiday promotions early but stayed far away from full-priced inventory.

 

Economists say consumers continued to scour the aisles for bargain-bin prices while holding off entirely on big purchases like electronics and other high-price point items. Likewise, many retailers pointed to a post-Christmas snowstorm than blanketed much of the Eastern seaboard, curtailing customer traffic for “week-after” promotions and dampening overall sales.

Despite all of this, Holiday 2010 still yielded overall growth of 3.8%, the highest growth rate since 2006, according to the International Council of Shopping Centers, which tracks 32 retail chains, excluding Wal Mart, Inc. Remarkably strong growth in November offset weaker-than-expected December same-store sales, which the ICSC said grew a modest 3.1%. In a recurring theme that many economists highlight to show the gap between middle-lower class and upper class is widening, the Luxury sub-segment jumped a robust 8.1% during December while discounters (+1.2%) and apparel-specialty stores (+0.8%) missed estimates with meager gains.

Online sales, on the other hand, continued to see notable growth through the fiscal month. According to online research firm comScore, retail e-commerce spending for the November-December holiday season reached $32.6 billion, marking a 12% increase over the year-ago period and representing an all-time record for the season. In a release, comScore Chairman Gian Fulgoni said eCommerce results for the holiday period exceeded the firm’s already-lofty expectations issued earlier in the year. 

“We cannot forget the impact of free shipping, which was used in more than half of all e-commerce transactions this season, up significantly from last year,” stated Fulgoni. As reported by SEW following November results (SEW_1049), Fulgoni confirmed Cyber Monday sales for 2010 were exceptional, with total transactions ranking the day as the heaviest spending day on record, surpassing the $1 billion mark.                           


For the brick-and-mortar stores, the ISCS called the holiday season “uneven,” with November representing strong consumer demand and December returning to a more “trend-like” performance. Furthermore, an ICSC-Goldman Sachs consumer survey suggested that a significant amount of November spending was self-oriented — as opposed to gift-oriented — which led to a lower holiday gift completion rate at the end fiscal November.

December’s results wrapped up a relatively strong 2010 calendar year that saw chain store sales rise by 3.3% — the strongest pace since 2006 (+4.8%). Looking forward, ICSC Research forecasts industry gains of about 2.5% for fiscal January, noting that consumer surveys suggest consumers will redeem a smaller amount of gift cards in January 2011 that they did in the year-ago period. For fiscal 2011, the ICSC expects sales to increase 3% to 3.5%.

For the majority of brick-and-mortar stores, low-margin items largely drove comps for fiscal December. Among department stores, most mid-market chains reported disappointing results, with Kohl’s (+5.9%), Macy’s (3.9%) and Stage Stores (+1.9%) missing estimates while JC Penney (+3.7%), Stage Stores (+1.9%) and Dillard’s (+7.0%) topping forecasts. Management for several chains, including Macy’s and Bon-Ton, pointed to blustery winter weather on the East Coast as a detractor to monthly sales. Macy’s CEO Terry Lundgren said December sales at Macy’s and Bloomingdales were “consistent with our high expectations,” but noted that snowstorms on the East Coast disrupted after-Christmas shopping. At JC Penney, however, management noted that the Northeast and Southeast were actually the best performing regions for the month.

 

For the department stores Luxury sub-segment, consolidated comps soared above expectations with Neiman-Marcus (+4.7%), Nordstrom (+8.4%) and Saks (+11.8) all topping forecasts for the month as rebounding stocks allowed wealthier customers to spend more in the aisles.  At Neiman-Marcus, management said strong demand of shoes, handbags and jewelry contributed to growth while Nordstrom officials pointed to strong sales of gift and holiday items during the front half of the month.

For the Discounters, consolidated results were surprisingly disappointing for the month, with usually-reliable Target (+1.8%) and Stein Mart (-2.0%) missing forecasts badly. Management at Stein Mart said bad weather in the Midwest, Northeast and elsewhere hurt sales while Target sold more low-margin goods than expected and saw notable weakness in electronics, toys and some home categories. Off-price retailer TJX (+2.0%), which operates T.J. Maxx, HomeGoods and Marshalls, topped expectations as consumers continued to demonstrate a  penchant for brand-name goods at discount prices. TJX president and CEO Carol Meyrowitz pointed to particular strength from the Marmaxx (T.J. Maxx, Marshalls) business and subsequently upped guidance for the fourth quarter.

For the mall-based retailers, Abercrombie & Fitch (+15.0%) continued a stellar turnaround while The Buckle (+6.1%) also came in above expectations. A&F management noted that as of the end of December, $22 million worth of promotional gift cards remained unredeemed. Results for the remaining teen retailers were disappointing, with Gap (-3.0%), American Eagle (-11.0%), Aeropastale (-5.0%), Zumiez (+9.2%) and Wet Seal (-2.1%) all missing expectations. Gap’s weak month was especially a surprise, as the company’s usually-dependable Banana Republic (+1.0%) only turned in moderate growth – not enough to offset near a double-digit drop at Gap’s namesake stores.

For Warehouse Clubs, comps were up 4.9% on a consolidated basis, although both Costco (+6.0%) and BJs Wholesale (+3.8%) missed estimates. BJs, which is already on the auction block, also announced it would close five stores due to weak sales. In November, BJ’s announced it had hired Morgan Stanley to run an auction of the company and “explore strategic options.”

 

Zumiez December Comps Up 9.2%…

Zumiez reported comparable store sales increased 9.2% for the five-week period ended January 2 compared to a 0.3% increase in the year-ago period. Total sales increased 14.1% to $88.5 million for the month from $77.6 million in the year-ago period.

 
Comparable sales growth was driven by an increase in comparable store transactions partially offset by a decrease in dollars per transaction. ZUMZ said that dollars per transaction were down due to a decrease in average unit retail and a decrease in units per transaction. Accessories, footwear, men’s juniors and hardgoods posted positive comps while boys posted negative comps.

ZUMZ’s highest comping region was the South, which was up 10% in Dec.

Quarter-to-date 2010 comparable store sales were 12.5% positive versus a negative 2.4% for the same period last year.

 

The Buckle’s Comps Up 6.1% for Dec…


The Buckle reported that December comparable store sales increased 6.1% while total net sales increased 10% to $161.81 million compared to $147.1 million a year ago.

On the men's side of the business, which represented approximately 45.5% of total sales for the month, sales were up about 14% and overall price points were up approximately 1.5% for the period. Strong categories on the men's side included denim, woven shirts, sweaters, outerwear, accessories, and footwear

Women's sales, which represented about 54.5% of total sales, were up approximately 5.5% versus the prior-year period.  Overall price points on the women's side of the business were down approximately 2.5%.  Strong categories in women's included denim, knit tops, and accessories.

Accessory sales increased 27% for the month, while footwear sales increased 8% for the period.