Limited, owner of the Victoria’s Secret brand, said today that sales at stores open at least a year rose 9 percent, exceeding the 6.3 percent average of analysts’ estimates compiled by Retail Metrics Inc. Gap, based in San Francisco, said so-called same-store sales rose 2 percent, while analysts projected a decline of 2.8 percent.
Retailers beat predictions in August and September as discounts boosted back-to-school shopping. Promotions lured consumers last month as well, helping some chains such as Gap that had weekly sales, said Brian Sozzi, a retail analyst for Wall Street Strategies Inc. in New York.
“The consumer is responding more to promotions,” Sozzi said. “If you had the right promotions, you got the sales.”
Overall, sales at the more than 30 chains Retail Metrics tracks trailed estimates last month, rising 1.5 percent, compared with a prediction of 1.7 percent. Same-store sales, a key indicator of a retailer’s growth because new and closed locations are excluded, have increased every month since September 2009.
Retail Stocks Rise
The Standard & Poor’s 500 Retailing Index rose 1.7 percent to 481.26, the highest level since May 3.
Gap jumped $1.17, or 6.1 percent, to $20.43 at 4:01 p.m. in New York Stock Exchange composite trading for the biggest gain since May 10. The retailer also said third-quarter profit probably rose to as much as 48 cents a share, exceeding the average analysts’ projection of 44 cents in a Bloomberg survey. Limited, based in Columbus, Ohio, increased $1.59, or 5.3 percent, to $31.43.
Luxury sales grew after wealthy shoppers gained confidence as stock markets neared two-year highs. Saks Inc. sales jumped 8.1 percent, exceeding the 3.6 percent Retail Metrics estimate. Shares of the New York-based retailer rose 3.9 percent.
Nordstrom Inc. said its sales increased 3.4 percent after analysts estimated a 3 percent climb. Closely held Neiman Marcus Group Inc. reported a 12 percent spurt, compared with a 1 percent prediction.
Several department store chains said higher temperatures hurt revenue in the first half of the month. The weather depressed total retail sales by about 1 percentage point during the month, said the International Council of Shopping Centers, a New York-based trade group.
Bon-Ton Stores Inc., Dillard’s Inc., J.C. Penney Co. and Kohl’s Corp. reported sales declines, while Macy’s Inc., the second-largest U.S. department store chain, posted a 2.5 percent gain for October, shy of the 2.8 percent average estimate.
“While we experienced some softness in sales early in October given the unseasonably warm weather, we ended the month with a strong trend going into the holiday selling season,” Chief Executive Officer Terry Lundgren said in a statement.
Teen apparel retailers also missed estimates. Aeropostale Inc. said same-store sales declined 2 percent, while analysts predicted a rise of 3.2 percent.
Retailers faced the toughest year-over-year comparisons in more than two years after sales rose 2.2 percent in October 2009, according to Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics. Analysts’ estimates declined during the month on concern the warmer weather would limit shopping, Perkins said.
Rising Consumer Confidence
Consumer confidence rose last month from a seven-month low in September, according to the Conference Board’s sentiment index. The measure increased to 50.2 in October, the third- lowest reading of the year.
Spending on Halloween may have increased to $5.8 billion in the U.S. from last year, according to the National Retail Federation. Holiday shopping by comparison may rise 2.3 percent to $447.1 billion, the Washington-based association said.
October’s results don’t give much guidance on the holiday shopping season because stores chase sales with discounts and there isn’t an event driving shoppers, Perkins said.
“We’re more likely to see what we saw in back-to-school this holiday, where consumers shop, but it will be late,” Perkins said.
To contact the editor responsible for this story: Robin Ajello at email@example.com