U.S. Retailers Report Weak December Sales On Soft Holiday Season

Friday, January 9, 2009
Mitchell Jaworski - AHN Reporter New York, NY (AHN) - Several major retailers reported disappointing sales figures for December as the industry saw a 1.7 percent drop in same-store sales for the month.
The weak sales environment impacted a broad range of retailers as everything from electronics to teen apparel and jewelry stores experienced declines.
The International Council of Shopping Centers reported U.S. December same-store sales fell 1.7 percent in what has become the worst holiday-shopping season in roughly 40 years.
Over the past two months, sales are down 2.2 percent, the biggest drop in a two-month time span since the international council of shopping starting tracking data in 1969.
Even Wal-Mart, the one retailer who has consistently beat sales estimates, saw sales slow in December. The discount chain did post a 1.7 percent increase in same-store sales, but the result was well short of the 2.8 percent increase analysts had expected.
Discount rival Target Corp., reported a 4.1 percent decline in same-store sales. Department stores, Macy's Inc. and Sears Holdings reported 4 percent and 7.3 percent declines, respectively. J.C. Penney Co. saw the steepest sales drop of the group, down 8.1 percent.
Wholesaler Costco Corp., reported a 4 percent sales decline, but attributed the drop to the impact of lower gas prices.
The weak December sales and dismal retail outlook led many retailers to adjust their earnings forecasts.
Wal-Mart said it now expects to earn 91 cents to 94 cents a share in the fourth quarter, down from previous guidance of $1.03 to $1.07 a share.
Macy's also drop earnings guidance for the fourth quarter, expecting 90 cents to $1 a share, down from earlier estimates of $1.10 to $1.30 a share. The department store chain also said it will be closing 11 locations in the coming months.