Santa’s Mixed Bag: Retail’s December Sales

by Alyssa Oursler | January 3, 2013 11:08 am

The run-up to Christmas saw a score of bullish headlines for retailers, pointing to the extra shopping days in the holiday season and optimistic temporary hiring numbers[1].

That jolly spirit hitched a ride out of town on Santa’s sleigh. Word on the Street was that U.S. retailers reported their weakest holiday sales since 2008 thanks to Hurricane Sandy, the looming fiscal cliff and the Newtown, Conn., shootings.

However, this morning’s release of same-store sales figures depicted a truth somewhere in the middle of the two sentiments. For some companies, that not-so-hot feeling played out, while others were the beneficiaries of low expectations or posted outright strong numbers.

Let’s take a quick look at some of the biggest movers in the retail space this morning — some losers reporting cold holiday seasons, as well as winners that got nice December numbers from Santa:


Limited Brands (NYSE:LTD[2]): Same-store sales for Limited Brands, parent company of Victoria’s Secret and others, fell short of estimates in December. They increased 3%, while experts had been expecting a climb of 4.5%. Total sales increased from $1.87 billion to $1.95 billion for the month, a climb of just more than 4%. LTD stock opened in the red nearly 5% on the news.

Kohl’s (NYSE:KSS[3]): Kohl’s slipped just under 2% on the open as the company reported an increase of 3.4% at stores open at least one year during the month of December. That handily beat analyst expectations, but overall December sales disappointed. Said CEO Kevin Mansell:

“December sales were lower than planned. Additionally, sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned.”

More bad news came with the company’s outlook. The retailer slashed its fourth-quarter EPS expectations to $1.60 to $1.62 per share, down from a previous target of more than $2. The full-year outlook was also revised downward, now coming in between $4.11 and $4.13 per share.


Gap Inc. (NYSE:GPS[4]): The news was much better for Gap, which owns its namesake stores and Old Navy. GPS opened up more than 5% on news that same-store sales rose 5%, besting hopes of a 3.5% gain. The climb could also be in part because of other news, namely, that Gap closed on the purchase of luxury apparel retailer Intermix on Monday, a $130 million deal. For the cherry on top for investors, the company also approved a $1 billion stock buyback plan.

Target (NYSE:TGT[5]): Target — which plans to stop reporting monthly same-store sales in fiscal 2013 — gained around 3% this morning despite revealing flat same-store sales that missed expectations of 1.3% growth in December. Investors might have been reassured by the fact that Target still expects Q4 earnings to at least meet previous low-end guidance.

Ross Stores (NASDAQ:ROST[6]): ROST shares gained more than 4% early after reporting strong same-store sales — a 6% improvement that doubled the high end of expectations and came on top of last year’s 9% gain. That helped overall sales for the month climb by double digits. The company also raised its guidance for Q4, expecting $1.05 to $1.06 per share vs. 99 cents to $1.04 per share previously.

TJX Companies (NYSE:TJX[7]): Fellow discount retailer TJX posted similarly impressive numbers, as same-store sales climbed 6% on top of last year’s 8% gain, powering a double-digit sales increase and an improved outlook. In Q4, TJX now expects year-over-year earnings growth around 25%. Investors weren’t ecstatic, but pleased, sending shares up just under 3% on the news.

Nordstrom (NYSE:JWN[8]): Nordstrom rounded out the good news, posting just less than 8% improvement in December same-store sales, while total sales rose just over 9% for the period. JWN shares rose almost 3% as a result.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.

  1. optimistic temporary hiring numbers:
  2. LTD:
  3. KSS:
  4. GPS:
  5. TGT:
  6. ROST:
  7. TJX:
  8. JWN:

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