The expected benefit from holiday gift card redemptions helped boost January U.S. retail sales numbers as consumers cashed in the cards and took advantage of the traditional January clearance period. While nasty weather in much of the East kept people at home and out of the mall, it also served to fuel sales of winter goods that sat on racks through the Christmas holiday period.
Gift cards have made January more important than it once was, said Marshal Cohen, chief analyst for market research firm NPD Group. Of 81,000 people who responded to a recent NPD survey, 52% received gift cards this year – and 68% of them redeemed them last month. “That’s the first time it ever came close to passing over that 50% mark,” Cohen said. “Gift cards put January on the map.” The month is usually the smallest retail sales month for the year, representing about 6.0% of sales.
According the monthly survey of 72 chain stores conducted by the International Council of Shopping Centers, comparable store sales rose 3.6% on top of a 6.0% comp sales gain in January 2004. ICSC had forecast a 2.5% increase for the month.
A number of retailers indicated strength in full price spring goods as well. “Solid sales of spring goods this early in the season indicate that consumers are feeling better,” said Ken Perkins, an analyst at RetailMetrics LLC, in a report. “It also bodes well for the bottom line.”
Perkins is predicting that fourth quarter earnings will still be healthy despite the heavy markdowns many retailers used to fuel sales in December. “The heavy discounting that took place doesnt seem to have taken a big bite out of the bottom line as one might have expected,” he said in the report. “Profits wont be stellar, but they will be OK.”
Despite the general decent performance in January retailers will have a number of challenges ahead of them in the next few months, including daunting comp numbers to anniversary. February comps increased 6.0% last year and March comps were up 7.0%. Retailers will also face rising interest rates higher fuel prices.
“There is no reason that this is going to be a bad time, but we are not going to see the fairly significant growth we saw” in the early part of last year, said Tracy Mullin, CEO of the National Retail Federation, which predicts that total sales will rise 3.5% this year versus the 6.7% growth in calendar year 2004.
Foot Locker, Inc. pointed to increased allocations of marquee footwear product — particularly at Champs — and renewed strength at its Lady Foot Locker unit for a 15.1% increase in sales for the fiscal fourth quarter January 29 to $1.54 billion, compared to $1.33 billion in Q4 last year. Excusing the benefits of currency fluctuations, Q4 sales were up 12.9% for the quarter. Comparable store sales increased 2.5% for the period.
“It was an interesting quarter,” said Foot Locker treasurer Peter Brown in a conversation with Sports Executive Weekly. He said Q4 “started off okay”, but “slowed down fast” after Thanksgiving weekend. Brown said the company had a “small negative comp” in November and recovered the last couple of weeks of December to post a low-single-digit gain for the month. January posted a high-single-digit increase in comp store sales.
Foot Locker did see a boost from gift cards, which came in from both their own efforts as well as mall cards, according to Brown.
But the biggest help came from Nike in the quarter as Foot Locker expanded their marquee product assortments. Brown said the infusion also helped increase average selling prices in low-singles for the quarter.
The Foot Locker USA business, which includes the Foot Locker, Lady Foot Locker, and Kids Foot Locker units in the U.S., was up in low-singles for the quarter, with the strongest performance coming from LFL. Brown said the gains at Lady are due to a “nice increase in apparel” as well as better merchandising and improved store operations.
The Champs business was up in very-high-singles for the quarter, a gain Brown said was due to a broader selection of marquee goods. The Europe business comped down in low-single-digits, but “improved noticeably” in Janaury. The DotCom business, which includes the footlocker.com and Eastbay units was down in low-singles, due primarily to a decline in the licensed apparel business. SEW also observed that the DotCom unit probably had less upside than the other businesses because they continued to have access to a broader range of Nike marquee product. Brown concurred with the assumption.
For the full fiscal year, sales increased 12.0%, or 9.8% in currency-neutral terms, to $5.36 billion from $4.78 billion in the fiscal 2003. Same-store sales increased 0.9% for the year.
Chairman and CEO Matt Serra said the company currently expects fourth quarter diluted earnings per share from continuing operations to increase 10% to 15% versus the comparable period of last year.
Fleet Feet, Inc. reported its full year sales results for 2004, announcing that its 61 franchise stores posted a 19.4% gain in overall sales for the year compared to 2003, surpassing $43 million in revenue. Comparative stores sales in 2004 were up 12.4% over 2003.
“Given the competitive climate in retail in this country-especially in sporting goods-we are extremely pleased with Fleet Feets performance in 2004,” said Fleet Feet President, Jeff Phillips. “Every owner of a Fleet Feet store is intricately involved in the daily operations of his/her business and the care of customers each day. Our continually impressive results prove that our hands-on, customer-focused model is a success.”
Fleet Feet recorded its first ever $4 million month in July 2004, followed by two more record-breaking months in August and September. Of the ten best sales months in Fleet Feets 28-year history, eight occurred in 2004. Thirteen new Fleet Feet stores opened for business in 2004 in nine states including five new stores in California.
Hibbett Sporting Goods reported that net sales for fiscal fourth quarter ended January 29 increased 17.5% to $107.2 million, compared to sales of $91.2 million in the year-ago period. The 2004 quarter was the first $100 million-plus quarter in company history. HIBB opened a net of 14 new stores in Q4 and comp store sales for the quarter increased 5.2% on top of an 8.3% comp sales increase in Q4 last year. January comps were up 6% on top of a 14% increase in January 2004.
For the full fiscal year, net sales increased 17.7% to $377.6 million, compared with $321.0 million for fiscal 2003. Comp store sales for the year increased 5.7%.
Hibbett expects to open a net of approximately 70 new stores in fiscal 2006, in addition to the 482 stores open at year-end.
Hibbett chairman, president and CEO Mickey Newsome said in a release that the they saw continued momentum in footwear, positioning of the equipment category for the spring selling season and “continuing to shift the mix in apparel from licensed to branded.”
Sales at Footwear Stores, according to the ICSC report, were up 1.8% for the month of January. That figure was tempered a great deal by a 3.0% decrease at Payless for the month which nearly offset the very nice gains at both Famous Footwear and Show Carnival.
Famous Footwear got a nice boost from the continued momentum in the Athletic Footwear category. Total sales were up 15.3% to $64.0 million for January, compared to $55.5 million for the year-ago month. Same-store sales for the period increased 10.8%. For the year, Famous Footwear sales were up 4.0% to $1.12 billion, compared to $1.07 billion for fiscal 2003. Same-store sales for the year were up 0.8%.
Shoe Carnival also got its fuel from Athletics in January, as comp store sales increased 6.3% for the period. Total sales increased 13.0% to $34.2 million from sales of $30.2 million for the year-ago period.
Carnival said the Womens business were up in low-single-digits and Mens sales were up in mid-singles. The Childrens business, which includes Kids Athletics, was up in high-single-digits. The Mens and Womens Athletics business were both up in high-singles as well. Total Footwear comps were up 6.6% and Accessories was up in high-single-digits.
SCVL said inventories “remained in good shape”, up almost
Full fiscal year sales increased 5.8% at Shoe Carnival to $590.2 million from sales of $557.9 million for 2003. Comparable store sales decreased 0.8% for fiscal 2004.
DSW Shoe Warehouse, the family footwear chain owned by Retail Ventures, Inc., reported that total January sales increased 33.2% to $56.7 million from $42.6 million in Q4 2004. DSW, which posted a 13.0% comp store sales gain for the month, now represents nearly 41% of total RVI sales versus just 34.7% of total sales in January 2004.
DSW full fiscal year sales ended January 29 increased 21.3% to $937.2 million, compared to $772.6 million in fiscal 2003. Full year comps rose 4.8% in 2004.
Apparel Chain store sales, which do not include Pacific Sunwear or The Buckle, rose 2.2% for the month on top of a strong 7.1% increase in the year-ago month. American Eagle Outfitters was again the top performer at retail with a gain of 22.0%, and Abercrombie & Fitch posted a strong 17.0% gain for the period. Gap was one of the bigger decliners, down 7.0% for January.
Pacific Sunwear affirmed analysts EPS estimates of 53 cents per share for the quarter after the company posted an 8.1% same-store sales increase for the month. PacSun comps were up 8.2% for the month and d.e.m.o. same store sales grew 6.9% for the period. Total transactions per comp store were up mid-single-digits. Average transaction value was up low single-digits, driven primarily by an increase in average units at retail. Total sales for January were $65.3 million, an increase of 20.0% over total sales of $54.4 million for the year-ago month.
For the month, PacSun comps were equally strong in guys and girls, as both increased approximately 8.0%. Guys same-store sales for the month were driven by woven shirts, denim, T’s and footwear. Girls same-store sales for the month were driven by denim, T’s and footwear. d.e.m.o. same-store sales rose 6.9% for the month, with girls up in the high-teens, and guys down in low-single-digits. Management said the majority of January business was fall clearance, but also said they were very pleased with the early selling of spring assortments.
Total sales for fiscal 2004 were $1.23 billion, an increase of 18.1% over total sales of $1.04 billion for fiscal 2003. Company same-store sales increased 7.3% for fiscal 2004, with PacSun same-store sales up 7.5% and d.e.m.o. same-store sales up 5.7%.
The Buckle reported that sales for January increased 13.8% to $25.7 million from sales of $22.6 million in the year-ago four-week period. Comparable store increased 8.6% for the period.
For the year, net sales increased 11.3% to $470.6 million from $422.8 million for the prior year. Comparable store sales were up 6.3% for fiscal 2004.
