Disappointing December Sales Reports Brings Mixed Reactions
The 2013 holiday retail season was tough, but that’s the only thing the industry can agree on.
Many Wall Street analysts have called the 2013 holiday retail season a disaster. Many prominent retailers have cut their fourth-quarter fiscal forecasts due to disappointing business during Christmas, the most important retail season of the year.
However, prominent shopping-center trade group International Council of Shopping Centers said that its index of sales from national retailers saw an increase during the two-month period of November and December, which make up the holiday retail season.
The combined sales for November and December of 2013 increased 3 percent compared with the same time in 2012, said Michael Niemira, ICSC’s chief economist.
“While some retailers undoubtedly faced a tough holiday season with more promotional activity, bouts of adverse weather and a cautious consumer, overall industry sales met expectations and managed to outpace last year’s growth rate,” said Michael P. Niemira, chief economist and vice president of research for ICSC.
Respected market-research company ShopperTrak said that Christmas sales beat expectations. On Jan. 8, the Chicago-headquartered company said that the season’s sales increased 2.7 percent, beating the 2.4 percent increase that ShopperTrak predicted before the holiday retail season started rolling.
National Retail Federation, another prominent trade group, announces its report of holiday business on Jan. 14.
Retail analysts have used uncharacteristically tough language to describe holiday business. In a Jan. 8 note, Liz Pierce of Ascendiant Capital Markets LLC wrote, “Overall, we would characterize the 2013 holiday season as a bust as week after week of storewide discounts and promotion did not seem to be enough to inspire consumers to shop like they have in previous seasons.”
In research notes dated Jan. 8 and Jan. 9, Adrienne Tennant of Janney Capital Markets said that consumers were going through a “malaise.” In her Jan. 9 note, Tennant wrote, “Our checks show that the holiday 2013 season had some of the deepest promotions we have seen in the recent past, including 2008.”
Based on same-store sales, many retailers—including The Buckle Inc.; Zumiez Inc.; L Brands Inc., the parent company of Victoria’s Secret; and Pacific Sunwear of California Inc.—either lowered or revised their fourth-quarter earnings forecasts. On Jan. 9, PacSun announced its same-store sales for its fourth quarter were flat when it excluded e-commerce. However, same-store sales were up 1 percent when e-commerce results were included for the quarter, said Gary H. Schoenfeld, the mall-based retailer’s president and chief executive officer.
“Overall, it has been a choppy holiday season,” Schoenfeld said in a statement.
Gap Inc., however, announced Jan. 9 that after examining most of holiday receipts, the company would not cut its guidance for its full-year earnings per share. The guidance range is currently $2.57 to $2.65 for fiscal 2013, said Glenn Murphy, chairman and chief executive officer of Gap Inc.
Murphy called his company’s December performance “solid.” Gap Inc’s same-store sales broken down by division include a 1 percent increase for the Gap Global division, a flat performance for the Banana Republic Global division and a decline of 2 percent for Old Navy Global.