Feb 3, 2011
Record snow seen hurting January retail sales
Feb 3, 2011
NEW YORK (Reuters) - Retailers will shed light on the impact of inclement weather on their initial spring sales when they report figures for January on Thursday.
The snowiest January in six years played havoc with hopes of a strong ending to the holiday season, weighing down shopper traffic in malls and stores, especially in the Northeast, which saw multiple snowstorms.
Fewer discounted goods in a typically promotional month could also have kept bargain-hungry shoppers away, analysts pointed out.
Retailers ranging from Target Corp to Saks Inc report January sales on Thursday. January is the final month and the smallest contributor to sales in the retail sector's fourth quarter.
Sales at stores open at least a year, or same-store sales, are forecast to rise 2.7 percent, compared with a rise of 3.3 percent a year earlier, according to Thomson Reuters data.
"The market is obviously very aware of Mother Nature's negative impact this month, as well as limited clearance levels. As a result, we would not read too much into any January softness," Retail Metrics President Ken Perkins said.
Like others, Perkins sees February as a better indicator of how retailers are faring.
In an early batch of results on Wednesday, mall-based teen apparel chain Hot Topic Inc reported a 3.3 percent fall in January same-store sales, while analysts expected only a 2.8 percent decline. On the other hand, Zumiez beat estimates with a 15.3 percent rise in same-store sales.
U.S. shoppers cut back on shopping in January after opening their wallets during November and December, helping U.S. retailers post their best holiday sales in six years.
Claudia Carrmoma was one of them. After scooping up discounts on clothes in December, she hardly shopped in January. The 38-year old New Jersey resident, who works at a jewelry store in Manhattan, said her spring shopping "depends on the money I make."
"I feel like I should save now," Carrmoma said.
Analysts expect teen chains American Eagle Outfitters Inc, Abercrombie & Fitch Co and Aeropostale Inc -- all three of which face tough comparisons versus last year -- as well as apparel chains such as Gap Inc to report same-store sales declines in January.
Luxury chains, Victoria's Secret parent Limited Brands Inc and warehouse club operator Costco Wholesale Corp are among those expected to do well.
"Despite the headwinds that existed during this month, we believe that recent solid trends at the high end likely continued through January as well, as luxury sales continued to outpace the middle and lower end," Barclays analyst Robert Drbul said.
He sees same-store sales rises for both Nordstrom Inc and Saks Inc.
(Reporting by Dhanya Skariachan; editing by Andre Grenon)
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