December retail, and the Holiday season in general, was seen as a “mixed bag” by analysts looking for some rhyme or reason behind the numbers that saw retail results all over the place this year. One thing is sure, if you had your own Internet business, and you offered and redeemed gift cards, you probably fared better than your competition that had neither.
At the end of the day, the numbers for Holiday fell far short of the hopeful 4.5% increase forecast by the National retail Federation, a number they held on to until the bitter end. But as Sports Executive Weekly recently suggested (SEW_0452), the long-established formulas for measuring retail health should probably be re-assessed in the year ahead-or possibly thrown out the door. The numbers of asterisks used in reporting numbers throughout the year due to calendar shifts, gift cards, and other changes in the retail landscape should cause more retailers to look more at reporting comps on a quarterly basis.
December and Holiday results again saw the dumbbell effect take hold in the market as Warehouse Clubs and Luxury Retailers at either end of the scale clearly outpaced the middle of the market. Same-store sales across the retail industry rose 2.7% for December, based on the monthly survey of 77 chain retailers conducted by the International Council of Shopping Centers. Even ICSCs forecast that had been revised down to a 3.5% to 4.0% increase fell short of reality for the period. Tepid results from some retailers were blamed for erasing large gains elsewhere in the market.
“There were some very strong performing companies and some that were very weak,” said Michael P. Niemira, ICSC’s chief economist and director of research. “That unevenness is the story of the holiday.”
Warehouse clubs did very well, posting a 7.3% gain for December, with Costco posting a 9.0% increase on top of an 11% gain in December last year. BJ’s Wholesale reported a 5.6% increase and Wal-Marts Sams Club division rose 5.4% for the period.
At the other end of the scale, Saks Fifth Avenue comps jumped 12.1% for the period on top of a 9.6% gain last year and Nieman Marcus increased 10.8% on top of a 14.8% gain last year. Nordstrom rounded out the big three luxe retailers with a 9.3% comp increase, just topping its results form a year ago. The total Department Store business was essentially flat, comping up just 0.6 for the month, as negative results at May Company and JC Penney erased low- to mid-singles gains elsewhere. JC Penney did warn that a calendar shift would impact its month after delivering a 12% same-store sales increase in November. JCPs nine-week Holiday period was up 3.1% this year.
Discount stores were also mixed, posting a 3.2% increase for the period. Target (+5.1%), Steinmart (+10.3%), and TJX (+6.0%) all showed better-than-average gains, while Value City (-2.4%), ShopKo (-5.3%), and Ross Stores (+2.0%) lagged the sector.
SEW looks at the numbers and finds that upper income households are clearly driving these gains on both ends of the spectrum. Those discounters that are seen as more “chic” to shop are performing well. More than one family bought big at both Nordstrom and Costco or Sams Club in the same day, but wouldnt set foot in a Sears store. Target and Marshalls can be found in this mix as well.
The Footwear Store sector saw comps decline 1.3% for December as trouble at Payless offset gains posted at both Famous Footwear and Shoe Carnival. The sector is certainly benefiting from the overall positive trend in Athletics.
Famous is starting to benefit from improving assortments in Athletic, as they push ASPs higher and add a higher level of fashion sensibility on the floor. Famous Footwear reported a increase in total sales for the month to $119.8 million compared to $111.8 million for the same period last year. Same-store sales were up 2.0%. Management again pointed to Athletics, where both fashion and classic styles drove momentum once again. They said they also saw strength in the Kids category. YTD comps at Famous were back into positive territory at month-end.
Shoe Carnival also looked to Athletic as the driver for the month as total sales increased 6.4% to $64.3 million from sales of $60.5 million in December last year. Comparable store sales increased 1.1%. Footwear was flat, but Accessories were up nearly 30% for the month.
Mens and Womens Athletics were up in mid-singles for the period and Childrens, which includes Childrens Athletics, was up in low-singles. Other Mens was down mid-singles and Womens was off low-single-digits.
SCVLs inventory reduction plan appears to be holding steady, declining 1.0% on a per-store basis at month-end on top of a 3.5% decline in that same measurement last year.
DSW Shoe Warehouse continues to roll along, posting a 22.4% total sales increase for December to $92.3 million from $75.4 million in December last year. Comps were up 3.9% for the month on top of a 13.9% increase in December last year.
Pacific Sunwear affirmed earnings estimates for Q4 after posting a 5.3% same-store sales increase for December. Total sales increased 16.4% to $218.3 million, compared to $187.5 million in December 2003. PacSun comp sales increased 5.0% and d.e.m.o. comps increased 8.3%, driven by strength in the Girls business. At PacSun, both the Guys and Girls business were up mid-singles. d.e.m.o. Girls sales were up in the mid-teens, while the Guys business was up in low-singles.
PSUN said the average transaction per comp store was up in high-single-digits in December, driven by a mid-singles gain in unit per transaction and average unit retail. Total transactions per comp store were down in low-single-digits.
The Buckle reported that sales for December increased 8.9% to $79.5 million from sales of $73.0 million in the year-ago month. Comparable store increased 4.4% on top of a 4.8% increase last year.
In Athletic, The Finish Line broke with their usual routine and gave more color on December sales. FINL saw a 9% comp store sales gain for the month — on top of a 22% gain in the year-ago period — versus the companys 5% growth plan for the month and 3% comp plan for the quarter. They increased Q4 guidance on the strength of Footwear and Branded Apparel.
At Hibbett Sporting Goods, net sales for the nine-week period ended January 1, 2005 increased 17.2% to $80.9 million compared with $69.0 million in the year-ago period. Comparable store sales increased 5.0% for the period on top a 6.7% comp sales increase for Holiday last year.
Footwear category sales were said to be better than expected while the equipment and apparel categories were in line with expectations. Gift card sales from Thanksgiving to Christmas were reportedly up over 30% versus last year.
While Hibbett reported a fairly strong Holiday season, the results may not be as favorable for those retailers that rely more heavily on the Outerwear business that is driven by weather; weather that was very uncooperative this year in the East and Midwest. The West Coast retailers cant get their hands on enough winter sports gear after record snowfalls in California, but the balmy weather in the South and the late arrival of Winter in New England may cause some concern for some.
The effect of the weather will clearly have an impact on the outerwear and fleece vendors as well as a number report a higher rate of cancels going into January as programmed orders back up in the system. Some have hinted that system issues with some retailers will leave too much of the wrong product on the floor this spring while others have been able to push responsibility back to the vendor.