Bloomberg News

L Brands, Costco Same-Store Sales Trail; Gap Tops Estimates (1)

December 05, 2013

L Brands Inc. (LB:US) and Costco Wholesale Corp. (COST:US) posted November same-store sales that trailed analysts’ projections as retailers poured on steep discounts to entice wary shoppers.

L Brands, owner of the Victoria’s Secret and Bath & Body Works chains, said sales at stores open at least a year fell 5 percent, more than the 1.2 percent decline estimated by analysts surveyed by Retail Metrics Inc. Same-store sales excluding fuel at Issaquah, Washington-based Costco rose 3 percent, less than the average projection for a 4.5 percent increase.

Retailers from Wal-Mart Stores Inc. (WMT:US) to Macy’s Inc. (M:US) have been offering deep holiday deals to attract shoppers who are uneasy about the strength of the economy and the security of their jobs. Researcher ShopperTrak last week reiterated a forecast it gave in September that holiday sales will grow 2.4 percent, the smallest increase since 2009.

“When the whole mall is 40, 50, 60 percent off for most of the month of November, it’s hard to stand out from the crowd,” Howard Tubin, a New York-based analyst at RBC Capital Markets wrote in an e-mail.

Same-store sales for the more than 10 retailers tracked by Swampscott, Massachusetts-based Retail Metrics climbed 1.9 percent last month, the researcher said in an e-mail. That’s less than the average estimate of a 2.9 percent gain.

Federation Survey

Purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation. The NRF asked 4,464 consumers Nov. 29 through Nov. 30 about their spending and plans, including for online shopping as well as at grocers and other retailers.

Some companies saw success from their holiday promotions. Gap Inc., the biggest U.S. specialty-apparel retailer, said November sales at stores open at least a year increased 2 percent from last year, exceeding the 0.7 percent estimated increase. Customers responded to the retailer’s sales during the week of Thanksgiving, San Francisco-based Gap said on a recorded sales call. The company offered discounts of as much as 50 percent off at its three brands during Thanksgiving and Black Friday.

“Fifty-percent off is compelling, and it’s compelling because you haven’t really seen it,” Simeon Siegel, a New York-based analyst at Nomura Securities said in a phone interview before Gap’s release. “There isn’t a whole lot other people are offering that is more compelling.”

Sales at the company’s Old Navy brand rose 3 percent, compared to a 2.3 percent estimated increase, and comparable sales at the Gap brand gained 2 percent, beating a 0.4 percent estimated rise.

ShopperTrak Data

ShopperTrak, based in Chicago, said sales over the four-day Thanksgiving holiday period rose 1 percent, citing sales and traffic data as well as receipt information that it compiles primarily from mall-based sellers of general merchandise, apparel, furniture and electronics.

J.C. Penney Co. (JCP:US), which is working to rebound from a 32 percent decline in same-store sales during last year’s holiday quarter, said earlier this week that comparable-store sales rose 10 percent in November.

Most chains tally same-store sales using locations open at least a year, making the figure a closely watched gauge of a retailer’s health because it tracks only established stores.

Gap rose 2.6 percent to $41.30 in late trading at 4:42 p.m. in New York. Columbus, Ohio-based L Brands fell 1.7 percent to $62.18 at the regular close of trading, while Costco shares slipped 1.6 percent to $120.95.

To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net

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


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Companies Mentioned

  • LB
    (L Brands Inc)
    • $69.33 USD
    • 2.03
    • 2.93%
  • COST
    (Costco Wholesale Corp)
    • $128.42 USD
    • 3.77
    • 2.94%
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