The Exchange

Retail Roundup: Sluggish Sales Trend for the Chains

The Exchange

Chain stores reporting holiday sales this week have been largely unimpressive, with GameStop (GME), Toys R Us and Tiffany (TIF) all posting lackluster results. Best Buy (BBY) said its revenue and same-store sales fell, but since even worse numbers had been feared on Wall Street, the stock soared in response.

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Best Buy Store
Beyond the "but it could have been so ugly" thesis driving Best Buy sharply higher, the bigger story is that none of these well-known and found-everywhere retailers had sales in the last two months of the year that suggest consumers were overly anxious to spend their money. Yes, they spent, though not at especially heightened levels at the stores offering comments in recent days.

Much more is coming from the retail sector in the weeks ahead, including monthly retail sales data on Tuesday, but for now here's some of what we've learned in the past few sessions:

--GameStop. Sales for the nine weeks ended Dec. 29 fell 4.6% from the 2011 holidays to $2.88 billion. Same-store sales were off 4.4%.

"GameStop experienced mixed results during the holiday selling period. Our successful [Nintendo] Wii U launch, strong digital growth and continued momentum in the mobile space were countered by a decline in store traffic," CEO Paul Raines said in a statement.

Fourth-quarter earnings likely will be at the bottom end of the company's projected range of $2.07 to $2.27, GameStop said.

--Toys R Us. December U.S. comparable-store sales decreased 1.8%. Total sales for the domestic segment fell 1.9%.

"We believe our December sales were impacted by softness in the overall markets for videogames, electronics, and toys, and by the uncertain economic environment in the U.S. and abroad," CEO Jerry Storch said in a press release. (Toys R Us is owned by Bain Capital Partners, Kohlberg Kravis Roberts and Vornado Realty Trust (VNO).)

--Tiffany. November and December worldwide net sales were up 4% to $992 million. Same-store sales were flat. Earnings for the fiscal year ending Jan. 31 are probably going to come in toward the low end of the expected range of $3.20 to $3.40 a share, Tiffany said.

CEO Michael Kowalski said in a statement that, because of "uncertainty about general economic conditions in all our major markets, management is planning sales growth conservatively for 2013 and at this point expects net earnings growth of 6% - 9%."

--Best Buy. The electronics seller said Friday that revenue was down 0.4% to $12.8 billion and same-store sales fell 1.4% in the nine-week period that ended Jan. 5. However, owing to the fact that some analysts thought it would be even weaker, Best Buy was up 16%.

--Macy's (M). Total December sales were $5.10 billion, up 3.6%, the company said last week. Same-store sales rose 4.1%. Combined November and December comp sales advanced 2.5%. Growth, yes, but "somewhat less" than the company had been anticipating, which it attributed in part to economic uncertainty and the effects of superstorm Sandy.

As a result, Macy's reduced its fourth-quarter forecasts. The company now expects same-store sales for the quarter to rise 3% to 3.5%, down from the previous estimate of 4.2%. Earnings are estimated at $1.91 to $1.96 before items, below the prior goal of $1.94 to $1.99.

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