Friday, February 8, 2013

January Same-Store Sales Gain on Bargains

Most retailers posted strong same-store sales gains in January, the final month of the fiscal year on the retail calendar, as shoppers were lured by post-holiday bargains in what is typically the lightest volume month of the year.

Total net sales for the 20 chains we track (adjusting for a 5-week fiscal month this year vs 4 weeks last year) increased 5.7% from a year ago to $32.8 billion in January, while same-store sales rose 4.7% compared to a 2.9% gain last year – this was the 41st straight monthly rise, and the strongest comp gain since September 2011.

Excluding drug stores, total sales in January increased 6.1% and same-store sales rose 5.2% from the year-ago period. For the full fiscal year ended January, the 18 chains (excluding drug stores) increased sales 7.6% to $304.5 billion and comparable store sales rose 4.5% following a 5.7% gain in fiscal 2011.

It looks as though spending held up last month, as the positive effects of a better job market and higher home and stock prices offset the negative effect of higher payroll taxes and gas prices.

Unfortunately, going forward we will have a much harder time keeping up with trends in between quarterly reports as another 6 chains - Target, Macy's, Nordstrom, Kohl's, Stage Stores and Wet Seal - announced they will no longer report monthly sales. This will leave only 14 major retailers reporting on a monthly basis, down from over 40 chains 5 years ago and more than the 100 retailers that used to report monthly sales a decade ago.

Macy's, which discontinued monthly reporting in February 2008 only to reinstate the practice 8 months later after investor outcry, explained they are just following the lead of their peers:
“What we are going to is really the industry standard,” Jim Sluzewski, a Macy’s spokesman, said in an interview. Getting rid of monthly sales reports also will prevent the misinterpretation of results when shifts in the calendar around holidays such as Easter make it difficult to compare months to the same periods a year earlier, he said.
Coscto, on the other hand, has long been one of the most shareholder-friendly companies and has always provided more detailed information than almost any retailer about it's operations:
“Some choose not to do it because of the nuisance factor, and it’s one more thing you have to explain when you are already giving out quarterly results,” Richard Galanti, Costco’s chief financial officer, said in a telephone interview. “At the end of the day, it is useful information, and we’ve done it for a long time.”

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