Happy endings: Holiday sales were better than expected
Many major U.S. retailers were able to recover from a slow start to December shopping, according to monthly sales results reported Thursday.
Despite early indications that the holiday season would be lackluster, the 17 chains tracked by Thomson Reuters reported a 4.5 percent increase in sales at stores open at least a year in December, exceeding the 3.3 percent gain analysts had expected.
However, Target, the nation's second-biggest retailer after Wal-Mart, said its December sales were flat.
And retailers relied on discounts to get that December revenue, which may hurt results when they report fourth-quarter profit.
"Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned," said Kevin Mansell, Kohl's chief executive and chairman.
He said the company would take further markdowns as it prepares for spring.
The stores reporting sales data Thursday ranged from apparel retailers to department stores, although some large retailers including J.C. Penney and Saks Fifth Avenue, as well as Wal-Mart, do not report monthly data.
Analysts noted a rush of last-minute promotions after slow sales early in the month.
"We've noticed significant promotions at retailers looking to recover preholiday sales, and fewer promotions at retailers we believe have performed well," Oliver Chen, a Citigroup analyst, wrote in a research note.
ShopperTrak, which counts shoppers at the nation's malls, reported that traffic picked up in the final week before Christmas. Still, in December it lowered its sales forecast for November and December to a 2.5 percent gain over last year, down from the 3.3 percent it had estimated previously.
Another reading on the holiday season was also tepid. MasterCard Advisors SpendingPulse, which estimates overall consumer spending, said last week that holiday-related sales rose 0.7 percent from the end of October through Christmas Eve, the smallest increase since 2008. Last year, sales were up 2 percent.
Most of the department stores reporting results Thursday beat analyst expectations.
Target, which heavily promotes the holiday season, said its same-store sales were flat compared with December 2011, while analysts had expected a 0.8 percent gain. Its heavily promoted collection of designer holiday gifts, in partnership with Neiman Marcus, was a disappointment, according to some analysts. The company said the number of same-store transactions fell compared with 2011, but the average amount spent per transaction rose, and that the food, health and beauty, apparel and home categories were up over last year.
"Strong results late in the month did not completely offset softness in the first three weeks," Gregg Steinhafel, chairman and chief executive, said in a statement.
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