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Retail Stocks Slip Amid Mixed December Sales, Q4 Outlook

Shanthi Rexaline

Fourth-quarter updates are painting a mixed picture of the holiday shopping season for retailers.

Target On Track For Strongest Comps In 13 Years

Target Corporation (NYSE: TGT) reported comp growth of 5.7 percent for the combined November-December period, an acceleration from 3.4-percent growth a year ago that came thanks to strong traffic, positive store comps and online comps growth of 29 percent.

The company reaffirmed its Q4 comp guidance of 5 percent, which would render the full-year comp growth the strongest since 2005. The company also said it continues to expect full-year adjusted EPS of $5.30-$5.50, surrounding the $5.39 consensus estimate.

L Brands Comps Stagnate In December

Specialty retailer L Brands Inc (NYSE: LB) said its December net sales slipped 1.5 percent year-over-year to $2.477 billion. Comps for the period remained flat with last year.

The full-year statistics were better, with 7.5-percent net sales growth and 3-percent comps.

L Brands raised its Q4 EPS guidance toward the high-end of its previous guidance range of $1.90-$2.10, which still fell short of the $2.70 consensus.

Macy's Trims Guidance

Department store Macy's Inc (NYSE: M) reported 0.7-percent comps for the November-December period, marking the second consecutive year of positive performance for the holiday period.

Macy's lowered its FY18 comp guidance for owned and licensed stores, and also adjusted EPS guidance from a range of $4.10-$4.30 to $3.95-$4, while analysts on average estimate EPS of $4.23.

Kohl's Holiday Comps Slow

Kohl's Corporation (NYSE: KSS) reported 1.2-percent shifted comps for the November-December period, a slowdown from the 7-percent growth seen in 2017. The department store raised the lower end of its adjusted EPS guidance from $5.35 to $5.50, but maintained the high end at $5.55. Analysts are targeting EPS of $5.51.

Zumiez Ups Q4 Guidance

Footwear and apparel retailer Zumiez Inc. (NASDAQ: ZUMZ)'s December comps slowed from 7.9 percent in 2017 to 4.9 percent in 2018. Total net sales for the month rose 2.9 percent year-over-year.

The company raised its Q4 comp and EPS guidance to 3 percent and $1.08-$1.10, respectively.

Costco's December Comps Rise

Wholesale club Costco Wholesale Corporation (NASDAQ: COST) reported 7.8-percent net sales growth for December. Comps rose 6.1 percent for the total company, thanks to a 7.5-percent increase in U.S. comps. Excluding the impact of gasoline prices, forex and accounting changes related to ASC 606, total company comps rose 7 percent, with U.S. comps up 7.1 percent.

Cato Holiday Sales Drop

Value fashion apparel retailer Cato Corp (NYSE: CATO) reported a 9-percent decline in December sales and flat comps.

"December same-store sales were slightly below our expectations," CEO John Cato said.

Barnes & Noble Sales Growth Comes At Expense Of Margins

Book retailer Barnes & Noble, Inc. (NYSE: BKS) reported 4-percent comps for the period between Black Friday and New Year's Day, and 1.3-percent comps for the nine-week holiday period ending Dec. 29.

The company said the comps were the best in several years, and said the numbers were achieved on the back of its new advertising campaign, improved website and an in-store pickup initiative for online purchases.

The retailer also said increased promotions helped sales growth as well as markdowns.

At last check, SPDR S&P Retail (NYSE: XRT) was seen declining 2.21 percent to $43.33.

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