Retail Sales Up Most Since March on Black Friday Boost

Retail sales rose the most in eight months in November, led by Abercrombie & Fitch Co. and J.C. Penney Co., and beat analysts’ estimates as consumers gobbled up discounts, particularly during the Thanksgiving weekend.

Teen retailer Abercrombie increased so-called same- store sales 22 percent, above the 6.4 percent average of analysts’ estimates compiled by Retail Metrics Inc. J.C. Penney, the third-largest U.S. department store chain, boosted sales 9.2 percent, above a projection of 3.3 percent. Apparel retailer Gap Inc., posted a gain of 5 percent, surpassing estimates.

Retailers began discounting earlier in November than the past few years and continued through Black Friday, the day after Thanksgiving and the biggest shopping day of the year. Some consumers are looking to spend as their fortunes improve alongside the employment outlook.

“We have continued to see people who have a pent-up demand,” said Keith Jelinek, a director in the retail practice at consultant AlixPartners. “People are more optimistic because they feel things can’t get worse and believe there is a light at the end of the tunnel.”

Abercrombie, based in New Albany, Ohio, surged $5.58, or 11 percent, to $56.02 at 4:01 p.m. in New York Stock Exchange composite trading for the largest gain since March 4. J.C. Penney, based in Plano, Texas, advanced 77 cents, or 2.3 percent, to $34.47. Gap, the San Francisco-based operator of the Banana Republic and Old Navy chains, rose 11 cents to $21.67.

Beating Estimates

Overall, sales at the more than 30 chains tracked by Retail Metrics surpassed estimates last month, rising 5.3 percent for a 14th straight gain, compared with a prediction of 3.5 percent. Sales gained 8.7 percent in March, the largest advance in a decade.

Retailers benefited from more shopping during the Thanksgiving weekend. Estimated sales for the four days reached $45 billion, a 9.1 percent gain from a year ago, as the number of shoppers rose 8.7 percent to 212 million, according to the National Retail Federation.

Most chains count locations open at least a year to tabulate same-store sales. This kind of revenue is a key indicator of a retailer’s growth because new and closed locations are excluded.

Costco Wholesale Corp. and Target Corp. led gains for discounters and both beat estimates. Department stores also stood out as Macy’s Inc., Kohl’s Corp. and Nordstrom Inc. joined J.C. Penney in surpassing projections.

‘Widespread Strength’

“Across the board, there was widespread strength,” said Ken Perkins, president of Swampscott, Massachusetts- based Retail Metrics. “The consumer is feeling better about their situation and is more inclined to spend on discretionary purchases. It bodes well for what will come over the next three and a half weeks.”

Aeropostale Inc., the New York-based teen retailer, was one of the few misses as sales dropped 1 percent last month, below the average estimate of a 0.6 percent gain. The shares fell as much as 14 percent, the biggest drop since December 2008.

Sales gained at many retailers last month as consumers became more positive on the economy. The people who believe the recession in the U.S. has ended increased to 17 percent from 13 percent late last month, according to a survey by Stifel Nicolaus & Co. That’s the highest reading since the question was first asked in May.

Confidence among shoppers also rose in November to the highest level in five months, according to the New York- based Conference Board. U.S. employment also improved last month as businesses added 93,000 workers to payrolls, the most in three years, according to ADP Employer Services.

Colder and wetter weather also may have boosted sales last month as consumers bought more outerwear after unseasonably warm weather in October, Perkins said. Abercrombie said sales of sweaters and fleeces led its revenue gains.

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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