Early data show retailers posting gains
U.S. retailers including Macy's Inc
Based on reports of 15 retailers out of 30 tracked by Thomson Reuters Data, 62 percent posted better-than-expected sales results for stores open at least a year in December, one of the most important months in the calendar for the sector.
Investors were eagerly awaiting the latest data, which will give the most detailed picture yet of the critical holiday shopping season. The figures point to the strength of consumer spending, which accounts for about two-thirds of U.S. economic activity, heading into 2010.
Wall Street expectations for a strong sales month rose in the past week, and by Wednesday, analysts were expecting a 2 percent increase, according to Thomson Reuters Data. That would be the best showing since a 3.4 percent gain in April 2008.
The increase is an improvement from the 3.6 percent decline seen in December 2008, when the financial crisis slammed the brakes on consumer spending, forcing retailers to offer steep discounts and leading to the toughest holiday shopping season in decades.
Since then, retailers have tightly managed their inventories, becoming less vulnerable to markdowns and protecting their profit margins.
Macy's posted a 1 percent rise in same-store sales, slightly better than analysts' estimates, and raised its quarterly earnings view. Shares of the department store operator rose 2.3 percent in trading before the market opened.
Aeropostale, Zumiez Inc
Still, he cautioned that there might be little impetus for increased consumer spending, at least until employment picks up.
It's all about the jobs, he said, adding that sales would have to return to at least 2007 levels for him to call it a turnaround.
We would like to see some mid-single-digit comp growth from these guys on a consistent basis, Perkins said.
IMPROVEMENTS SEEN FOR MOST SECTORS
Costco
Sears
Analysts were expecting same-store sales increases across the board, according to Thomson Reuters, except for the teen sector, where results have been mixed.
Skate and snowboarding-inspired retailer Zumiez posted a surprise 0.3 percent increase in December sales and raised its quarterly earnings outlook late on Wednesday, sending its shares up 13 percent after hours. Analysts had forecast a 6.4 percent decline.
Retailers who fell short of expectations included Hot Topic Inc
Traffic to Hot Topic stores was slow as there were more visually appealing promotions elsewhere in the mall on items in line with prevalent fashion trends, Wall Street Strategies analyst Brian Sozzi said, citing plaid, straight-leg denim, and military styles.
Limited reported a deeper-than-expected 2 percent decline, but raised its quarterly earnings-per-share outlook. The company said its sales and merchandise margins were above expectations.
Overall, the International Council of Shopping Centers has forecast a same-store sales increase of about 2 percent for December, while the National Retail Federation expects holiday sales for November-December to decline 1 percent.
(Additional reporting by Brad Dorfman in Chicago; Editing by Michele Gershberg and Lisa Von Ahn)
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