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Holiday Season's Retail Winners And Losers
Same-store sales reports for retailers for the holiday season were mixed with some seeing double-digit percentage gains and others lagging behind due to heightened competition and poor accessibility that resulted from the recent snowstorms.
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Industry
The International Council of Shopping Centers (ICSC) reported that same store sales rose in December 2010 by 3.1%. The ICSC survey polls 32 retail chains across several different formats, and reported strength in department stores and the luxury segment, with apparel chains lagging.
December shopping activity fell slightly short of expectations and this was surprising, considering that the monthly figures were impacted by the blizzard that hit the Northeastern United States the last week of the month.
The holiday season is of paramount importance to retailers because a large component of the industry's profits are earned during this period.
Apparel Winners and Losers
One apparel chain that didn't lag behind was Abercrombie & Fitch (NYSE:ANF). The company reported one of the best performances in December 2010, with a comparable store sales increase of 15% in the five-week period ending January 1, 2011. The quarter was even better, with a 17% increase in comparable store sales.
Abercrombie & Fitch also showed strength across its entire store base, with the main Abercrombie & Fitch brand up 13%, Abercrombie Kids up by 12% and Hollister Co. up 17%.
Aeropostale (NYSE:ARO) reported that same-store sales decreased 5% in the five-week period ending January 1, 2011. The company didn't mention the weather as a cause of the decline and called the holiday season "highly competitive." The company reiterated the previously issued fourth quarter earnings guidance range of $0.94 to $0.96 per diluted share.
Another loser over the holiday season was Gap (NYSE:GPS), which reported a 3% decline in comparable store sales in the five weeks ending January 1, 2011. Even worse for the company was that Gap North America was down 8% during that period while Old Navy sales fell by 2%. Like Aeropostale, the company is sticking with its full fiscal-year earnings guidance of $1.77 to $1.82 per share.
Luxury
Saks (Nasdaq:SKS) was a winner in the upscale segment with an 11.8% increase in comparable store sales in the five weeks ending January 2, 2011. The company is having a strong recovery, with a 6.5% increase in comparable store sales over the last 11 months.
The Bottom Line
Overall same store sales reports for the holiday season were in positive territory as the consumer begins to break out of the frugality practiced during the recent recession. The good news was selective, however, as many retailers remained in negative territory. (Financial discipline is the key to successful growth in the retail industry. See The 4 R's Of Investing In Retail.)
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IN PICTURES: 5 Money-Saving Shopping Tips
Industry
The International Council of Shopping Centers (ICSC) reported that same store sales rose in December 2010 by 3.1%. The ICSC survey polls 32 retail chains across several different formats, and reported strength in department stores and the luxury segment, with apparel chains lagging.
December shopping activity fell slightly short of expectations and this was surprising, considering that the monthly figures were impacted by the blizzard that hit the Northeastern United States the last week of the month.
The holiday season is of paramount importance to retailers because a large component of the industry's profits are earned during this period.
Apparel Winners and Losers
One apparel chain that didn't lag behind was Abercrombie & Fitch (NYSE:ANF). The company reported one of the best performances in December 2010, with a comparable store sales increase of 15% in the five-week period ending January 1, 2011. The quarter was even better, with a 17% increase in comparable store sales.
Aeropostale (NYSE:ARO) reported that same-store sales decreased 5% in the five-week period ending January 1, 2011. The company didn't mention the weather as a cause of the decline and called the holiday season "highly competitive." The company reiterated the previously issued fourth quarter earnings guidance range of $0.94 to $0.96 per diluted share.
Another loser over the holiday season was Gap (NYSE:GPS), which reported a 3% decline in comparable store sales in the five weeks ending January 1, 2011. Even worse for the company was that Gap North America was down 8% during that period while Old Navy sales fell by 2%. Like Aeropostale, the company is sticking with its full fiscal-year earnings guidance of $1.77 to $1.82 per share.
Luxury
Saks (Nasdaq:SKS) was a winner in the upscale segment with an 11.8% increase in comparable store sales in the five weeks ending January 2, 2011. The company is having a strong recovery, with a 6.5% increase in comparable store sales over the last 11 months.
The Bottom Line
Overall same store sales reports for the holiday season were in positive territory as the consumer begins to break out of the frugality practiced during the recent recession. The good news was selective, however, as many retailers remained in negative territory. (Financial discipline is the key to successful growth in the retail industry. See The 4 R's Of Investing In Retail.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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