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U.S. retailers’ sales miss estimates as Sandy cuts holiday

BLOOMBERG FILE PHOTO/SAM HODGSON
RETAILERS IN THE United States trailed analysts' estimates in November as Hurricane Sandy dressed traffic early in the month.
Posted 11/30/12

NEW YORK - U.S. retailers posted November same- store sales that trailed analysts’ estimates as superstorm Sandy depressed traffic early in the month, overwhelming gains from the start of holiday shopping.

Sales at Macy’s Inc., the second-biggest U.S. department- store company, fell 0.7 percent, compared with the average projection for a 2.5 percent gain from analysts surveyed by researcher Retail Metrics Inc. Kohl’s Corp., the Menomonee Falls, Wisconsin-based department-store chain, said same-store sales fell 5.6 percent, trailing estimates for a 2.1 percent gain, spurring its biggest stock decline in two decades.

Sandy, which may have caused $50 billion in damage, closed stores and cut spending in the Northeast after making landfall Oct. 29. The storm may have trimmed 1 percent to 2 percent from November sales, which usually benefit from promotions the weekend after Thanksgiving, Erika Maschmeyer, a Robert W. Baird & Co. analyst in Chicago, said in a note before the report.

“November is critical, and the fact that it had these really devastating back-to-back weather events at the beginning means it may be tough to make up for those missed days in a heavily populated part of the country,” Alison Paul, who leads the retail group at Deloitte LLP in Chicago, said today in a telephone interview.

Same-store sales for the more than 20 companies tracked by Swampscott, Massachusetts-based Retail Metrics rose 1.6 percent, excluding drugstores, trailing the estimate for a 3.5 percent gain, the firm said today. That follows a 5 percent increase in October.

Holiday gains

Sandy’s impact elevates the importance of December, which historically provides about half of fourth-quarter sales, Matthew Boss, an analyst at JPMorgan Chase & Co. in New York, wrote in a note today. Two more shopping days than last year and cooler weather will help boost sales, he wrote.

Shoppers spent $59.1 billion in stores and online in the four days starting Nov. 22, 13 percent more than last year, as retailers started deals on Thanksgiving and earlier, according to the National Retail Federation. That follows a 16 percent increase in 2011.

The U.S. economy grew at a 2.7 percent annual rate in the third quarter, more than previously estimated, revised figures from the Commerce Department showed today in Washington. The Bloomberg Consumer Comfort Index rose to minus 33 in the week ended Nov. 25, the highest level since April, from minus 33.9 the previous week.

Household purchases in the quarter climbed at a 1.4 percent rate, the least in more than a year and down from a previously reported 2 percent rate.

Critical quarter

Strong momentum from the Thanksgiving weekend “may be tough to maintain with the drumbeat of bad news coming out of Washington, the controversy around the fiscal cliff and people being uncertain with what’s going to happen with taxes,” Paul said. “Retailers are going to have to redouble their efforts to continue to build excitement through the holiday season.”

Retailers’ fourth quarter, which ends in January, is typically their most important, accounting for about 20 percent to 30 percent of annual sales at many companies.

Macy’s, based in Cincinnati, fell 4.3 percent to $38.62 at the close in New York after reporting its first same-store sales decline in at least three years.

Kohl’s dropped 12 percent to $45.02, the biggest one-day decline since the retailer’s initial public offering in May 1992. It had the biggest loss in the Standard & Poor’s 500 Index today.

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