Limited, Macy’s Monthly Sales Top Estimates on Holiday Deals

Limited Brands Inc. and Macy’s Inc. (M) posted November same-store sales that topped analysts’ estimates as Thanksgiving weekend deals drew record crowds, while stores that missed out on the shopping blitz trailed expectations.

Sales at Limited Brands, operator of the Victoria’s Secret lingerie chain, climbed 7 percent, beating the average projection for a 4.9 percent gain from analysts surveyed by researcher Retail Metrics Inc. Macy’s posted a 4.8 percent increase in same-store sales, topping the 4.1 percent estimate.

Some retailers are getting a sales lift from shoppers that leaped at holiday discounts to buy gifts for others and treat themselves, while chains such as Kohl’s Corp. (KSS) and Target Corp. (TGT) failed to take advantage of the pent-up demand. Consumers spent a record $52.4 billion during Thanksgiving weekend, 16 percent more than last year, the National Retail Federation has said.

“Black Friday might have improved the number,” said Marshal Cohen, chief industry analyst at NPD Group in Port Washington, New York. “We saw a lot of business during a bad economy.”

Same-store sales for the more than 20 companies tracked by Swampscott, Massachusetts-based Retail Metrics rose a combined 3.2 percent, topping the estimate for a 3.1 percent increase.

Sales at Saks Inc., the luxury department store based in New York, increased 9.3 percent in November, exceeding the estimate of 5.9 percent, the company said in a statement today.

‘People Were Excited’

“What you saw on Black Friday is people were excited early,” Chief Executive Officer Steve Sadove said in a Bloomberg Television interview today. Luxury consumers continue to spend on the most expensive items, such as fine jewelry and exotic-skin handbags, he said. The direction of the stock markets will be key to sales for the remainder of the holiday season, he said.

Limited climbed 0.7 percent to $42.61 at the close in New York. Macy’s fell 0.5 percent to $32.16. The Standard & Poor’s 500 Retailing Index gained 0.4 percent.

Kohl’s reported sales that declined 6.2 percent, trailing the average estimate for a 2.1 percent gain. Monthly sales for the Menomonee Falls, Wisconsin-based company were “disappointing,” CEO Kevin Mansell said in a statement.

Target, the second-largest discount chain in the U.S., reported sales gained 1.8 percent, trailing the estimate for a 2.9 percent increase. CEO Gregg Steinhafel said in a statement that Minneapolis-based Target had trouble living up to a “strong performance” last year.

Kohl’s tumbled 6.4 percent to $50.37, while Target fell 1 percent to $52.15.

High-End Promotions

Shoppers may have been attracted to the promotions for higher-end items and shied away from some discounters, said David Bassuk, head of the global retail practice at consultant AlixPartners.

“Sixty percent off a high-ticket item is a lot more money in their pocket than 60 percent off a low-cost item,” Bassuk said in a telephone interview from New York. Many shoppers felt they could wait to make their mid-tier purchases later, he said.

Limited Brands also said it would pay a $2 special dividend to shareholders on Dec. 23. Victoria’s Secret, Columbus, Ohio-based Limited Brands’ largest chain, reported November sales climbed 11 percent, beating the average estimate for a 6.3 percent gain.

‘Increasingly Important’

“Black Friday through Cyber Monday has become an increasingly important part of the holiday shopping season, and I am pleased with our results for the weekend,” CEO Leslie Wexner said in an e-mail.

Sales at Cincinnati-based Macy’s were aided by strong Black Friday sales, CEO Terry Lundgren said in a statement today.

Consumers had put off their own shopping to wait for expected heavy holiday promotions, the Washington-based NRF said. Shoppers spent $398.62 on average, compared with $365.34 a year earlier, the NRF said. A record 226 million people went shopping during the Thanksgiving weekend, compared with 212 million last year.

Consumer spending, which accounts for about 70 percent of the economy, grew at a 2.3 percent annual rate in the third quarter, the fastest pace of 2011, the Commerce Department said Nov. 22.

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

The strong Black Friday sales are unlikely spur momentum during the holiday season, Cohen said in a telephone interview before today’s results.

“Just because the deals are good doesn’t mean that consumers have a bigger paycheck or more money in the bank to spend,” Cohen said.

To contact the reporters on this story: Ashley Lutz in New York at alutz8@bloomberg.net; Cotten Timberlake in Washington at ctimberlake@bloomberg.net

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

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