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Hurt By Sandy, Retailers Are Thrown A Black Friday Lifeline

Hurt By Sandy, Retailers Are Thrown A Black Friday Lifeline
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U.S. retailers may be off to a promising start to the holiday shopping season, but super storm Sandy and the distraction of the presidential election generated poor November sales among some major players.

Big-box giant Target and department stores Kohl's, Nordstrom and Macy's reported larger than expected declines in sales compared to last year.

However, the end of the month saw better sales beginning on Thanksgiving night, as frenzied shoppers seized upon Black Friday discounts.

Strong Cyber Monday retail online sales also helped to offset the rough start to the month.

The month began with a sales lull due to the U.S. presidential election and the aftermath of superstorm Sandy.

Limited Brands was among the few bright spots, as women flocked to their Victoria's Secrets stores.

Target Corp. (TGT: Quote) reported a 1.0 percent decline in comparable store sales for the month, missing analysts' expectations of a 2.1 percent growth. Total monthly sales edged down 0.1 percent to $6.18 billion from the prior-year month.

"November sales were below our expectations, reflecting weaker-than-planned sales performance in the first two weeks combined with stronger sales growth across all channels later in the month," Chairman, President and CEO Gregg Steinhafel said.

Kohl's Corp. (KSS: Quote) reported a 5.6 percent decline in total comparable sales for the month, while the Street expected a 1.9 percent increase. Total sales also decreased 4.9 percent year-over-year to $1.83 billion.

Higher-end Nordstrom, Inc. (JWN: Quote) reported a 1.1 percent drop in same-store sales for November. Preliminary total retail sales for the month were $926 million, up 1.8 percent from last year.

Macy's (M: Quote) same-store sales for November edged down 0.7 percent over last year, missing the analysts forecast for a 1.5 percent growth. Net sales also edged down 0.6 percent to $2.45 billion from a year ago.

"Despite the largest-volume Thanksgiving weekend in our company's history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy," Macy's Chairman, President and CEO Terry Lundgren noted.

Among clothing retailers, Gap's November net sales grew 3 percent to $1.52 billion from $1.47 billion in the prior-year month. Street was looking for a 3.9 percent growth.

"Customers continue to respond positively to our product this year, enabling us to deliver consistent comp sales growth in North America," Gap's Chairman and CEO Glenn Murphy noted.

Teen girls store Wet Seal, Inc. (WTSLA: Quote) stated its comparable sales declined 5.4 percent in the month, while analysts estimate was for a 6.8 percent drop.

Limited Brands, Inc. (LTD: Quote), the operator of Victoria's Secret and Bath & Body Works chains, said its November comparable store sales rose 5 percent, reflecting strength across of its three brands. The result exceeded Street expectations of a 3.1 percent growth. Net sales grew to $922.0 million from $872.6 billion last year.

Off-price retailer TJX Cos., Inc. (TJX: Quote) reported that November comps were up 3 percent and total sales increased 7 percent from last year to $2.2 billion.

Ross Stores, Inc. (ROST: Quote) said November same-store sales increased 2 percent. Total sales rose 6 percent to $813 million from a year ago.

Meanwhile, a report released from the Conference Board on Tuesday showed a continued improvement in Consumer confidence in the U.S. in the month of November. Consumer confidence index rose to its highest level in over four years since coming in at 76.4 in February of 2008. The Conference Board said its consumer confidence index climbed to 73.7 in November from an upwardly revised 73.1 in October.

Looking ahead to December, most of the retailers anticipate a very competitive and promotional environment as consumers continue to focus on value. Some of them are also hiring additional seasonal workers this holiday season to boost sales.

The holiday shopping season is expected to be tepid as consumers will hold back on spending on the back of the 'fiscal cliff' that will see big tax increases and spending cuts starting January 2013.

Comparable-store sales or comps is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year. Analysts polled by Thomson Reuters expected the retailer's comparable store sales to increase 3.3 percent in November, just below last November's 3.5 percent growth.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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