Investors have been eagerly awaiting the retail sales data for the month of December 2009, which give a detailed picture of the critical holiday shopping season. The figures point to the strength of consumer spending heading into 2010 - good news considering this spending accounts for about two-thirds of U.S. economic activity.
Although low prices and pent-up demand have helped entice Americans back into the stores, shoppers are still showing some caution about opening their wallets.
Retailers have lowered inventory levels during the crucial holiday season in an effort to preserve margins, making it less vulnerable to markdowns and sell more items at full price. They are also entering 2010 with fewer clearance racks and expecting fourth-quarter profits to improve from last year, when many lost money.
Analysts have said that discounters and wholesale club operators would emerge the holiday winners, while many apparel stores are likely to suffer sales declines. In mid-December, National Retail Federation or NRF said it continues to forecast holiday retail industry sales would decline 1% from last year to $437.6 billion.
While this number falls significantly below the ten-year average of 3.39% holiday season growth, the decline is not expected to be as dramatic as last year's 3.4% drop in holiday retail sales nor as severe as the 3.0%t decline in annual retail industry sales expected for all of 2009.
Among apparel retailers, women's apparel firm Limited Brands Inc. (LTD) and specialty retailer Wet Seal Inc. (WTSLA) reported decline in comparable-store sales, a key retail measure, for December. However, both the companies now expect improvement in their financial results for the fourth quarter. Meanwhile, casual apparel retailer Buckle Inc. (BKE) reported an increase in its same-store sales for the period.
Limited Brands posted a 2% decline in comparable store sales for the month. The company, however, raised its earnings outlook for the fourth quarter, citing better than expected sales and merchandise margins for the fourth quarter to date. The Columbus, Ohio-based company's net sales for the five weeks ended January 2, 2010 totaled $1.660 billion, compared with $1.664 billion reported in the corresponding period last year.
Les Wexner, chairman and chief executive officer of Limited Brands, said, "We are very pleased with our holiday performance. We managed inventory and expenses conservatively and focused on execution and speed to maximize sales and margin. Going forward, we plan to continue our conservative management of the business and increase our emphasis on speed and agility."
Comparable-store sales at the Victoria's Secret Stores for December declined 6%, compared with a 9% decline last year. La Senza comps decreased 4%, compared with a 10% drop in the previous year. Bath & Body Works' comparable-store sales rose 4%, compared with a decline of 11% in December 2008. Limited Brands' comps declined 2%, versus a decrease of 10% reported a year earlier.
For the 48 weeks ended January 2, 2010, Limited Brands' comparable-store sales dropped 5%, compared to a 9% drop in the year-ago period. Net sales for the period decreased to $8.010 billion from $8.451 billion reported a year earlier.
Comparable-store sales decline at the Victoria's Secret Stores for the year-to-date period was 7%, compared to a decline of 8% in the same period last year. La Senza's comps for the period decreased 9%, compared to a decline of 3% a year ago. At Bath & Body Works, same-store sales were flat with the year-ago period. In the prior-year period, comparable store sales at Bath & Body Works declined 10%.
Looking ahead, Limited Brands raised its earnings outlook for the fourth quarter to a range of $0.92-$0.97 per share from $0.71-$0.86 per share. Analysts currently expect the company to earn $0.83 per share for the fourth quarter.
Kearney, Nebraska-based Buckle reported comparable-store sales growth of 6.6% for the month of December 2009. Net sales for the month rose 12.1% to $147.1 million from $131.2 million in the prior-year period.
The company's comparable-store sales for the year-to-date period increased 8.5% from comparable store net sales for the year-ago period. Net sales for the period climbed 14% to $848.1 million from $744.0 million in the same period last year.
Foothill Ranch, California-based Wet Seal reported a 4.6% decline in total comparable store sales for the month of December, compared to a 12.5% decrease in the year-ago period.
Total net sales for the month declined 1.8% from the previous-year period to $75.8 million. Sales at Wet Seal stores for December declined 3.1% from the prior-year period to $64.2 million, while sales at Arden B stores declined 6.0% to $11.6 million.
Same-store at Wet Seal stores for December declined 7.3%, compared to a 6.6% decline in the previous-year period. However, sales at Arden B stores for the month rose 14.1%, compared to a 36.9% drop in the same period of the prior year.
Ed Thomas, president and chief executive officer of Wet Seal said, "December shopping patterns were consistent with our expectations. Comparable store sales improved in the last two weeks of the month, as many customers delayed holiday shopping to the final few days before Christmas and the week after Christmas. Through careful inventory and promotional planning, we maintained merchandise margin performance in line with our expectations at both divisions through the holidays."
Looking ahead, Wet Seal now expects earnings for the fourth quarter in a range of $0.06-$0.07 per share, which is within the high end of its prior range of $0.03-$0.07 per share. On average, eight analysts polled by Thomson Reuters expected the company to report earnings per share of $0.06 for the quarter. Analysts' estimate typically excludes one-time items. The company said that the earnings outlook reflects gross margin performance in line with its previous guidance and continued cost management discipline in all other areas of its business. However, the outlook does not include any non-cash benefit to income taxes for the potential reversal of the company's deferred income tax valuation allowance or any estimate for potential non-cash long-lived asset impairment charges.
For comments and feedback contact: editorial@rttnews.com
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.