Retail sales climbed 0.2% in December, and core retail sales ex-autos were up 0.6% on the month beating expectations.
But everything retailers have said suggests otherwise. In fact, most of them seem to have had a rough go of it this holiday season.
Many were hit by slower sales as shoppers didn't make it to the stores till closer to the Christmas holiday. And competitive holiday sales impacted overall performance.
This prompted a string of retailers to cut guidance. Some like Macy's didn't report an earnings hit, but announced job cuts and store closures. We included commentary from the retailers wherever possible.
Here's a quick round-up:
- Lululemon: Yoga gear maker Lululemon cut its Q4 forecast and expects net revenue in the $513 million to $518 million range, down from a previous estimate of $535 million - $540 million. The EPS guidance was also cut to $0.71 to $0.73, down from $0.78 to $0.80. "We were on track to deliver on our sales and earnings guidance through the month of December; however, since the beginning of January, we have seen traffic and sales trends decelerate meaningfully," CFO John Currie said in a press release. "Based on this recent performance and assuming these trends continue through the remainder of January, we are reducing our outlook for the fourth quarter."
- Sears Holdings: Sears warned of Q4 loss adjusted loss of $2.01 - $2.98, missing expectations for $0.26 per share. It also said year-to-date sales are down 3.9%. "Total domestic comparable store sales for the quarter-to-date period declined 7.4%, comprised of decreases of 5.7% at Kmart and 9.2% at Sears Domestic. Kmart's quarter-to-date comparable store sales decline reflects declines in most categories including consumer electronics, grocery & household and toys. Sears Domestic's quarter-to-date comparable store sales decline is attributable to decreases in most categories including consumer electronics, tools and home appliances."
- Bed Bath & Beyond: The home goods retailer cut its Q4 guidance to $1.60-$1.67, down from their estimate of $1.70-$1.77. This was also below estimates of $1.79 per share.
- Express: Q4 guidance was cut to $0.57 to $0.61 per diluted share, down from $0.66 to $0.71 per diluted share. The company also lowered its full-year guidance. "Our fourth quarter guidance issued in early December 2013 contemplated a promotional holiday season as well as a slowdown in traffic after the Thanksgiving week," CEO Michael Weiss said in a press release. "What we experienced was a drop in traffic that was even deeper than anticipated, as consumers waited until much closer to Christmas to shop. To ensure that we captured customer dollars when customers ultimately arrived, and with a view to preventing inventories from building, we extended the duration of our promotions and deepened the discount being offered. January traffic to date has been weak and we have remained promotional and expect to maintain this stance throughout the month."
- L Brands: The retailer that owns Victoria's Secret, La Senza, and Bath & Body Works among other brands lowered Q4 earnings guidance to $1.60 per share, down from $1.67 - $1.82 per share. "The decrease versus its previous forecast is primarily the result of lower than forecasted merchandise margins due to incremental promotional activity," the company said in a press release.
- Family Dollar: Q2 2014 guidance is expected to be between $0.85 and $0.95 per share, down from $1.21 per share in Q2 2013. "Many of the top-line challenges we faced in the first quarter, including a challenged consumer and an intensified promotional environment, have continued to impact our business," CEO Howard Levine said in a press release. "Comparable stores sales for December decreased about 3%, driven primarily by a decline in customer transactions. In addition, we reacted to softness in discretionary categories by leveraging promotions more than we originally planned. Reflecting our December results, our expectations that the macroeconomic trends will continue, and the impact of investments we plan to make to strengthen our value proposition, we have lowered our earnings expectations for the second quarter of fiscal 2014 and the full year."
- Stage Stores: The department store company lowered its 2013 adjusted EPS guidance to between $1.10 to $1.15 down from $1.20 to $1.30. "Traffic slowed in the weeks leading to Christmas and we were not able to maintain our early positive sales trend," CEO Michael Glazer said in a press release. "Our overall performance was impacted by the highly promotional sales environment for apparel retailers as well as the difficult retail calendar."
- Macy's: Macy's plans to close five of its 800 stores and cut 2,500 jobs. The retailer was the outlier in that it saw comp store sales rise 4.3% in what was a largely challenging holiday season for other retailers. "Even in a questionable macroeconomic environment with challenging weather in multiple states, the positive response from our customers during the holiday season is yet another vote of confidence that our well-established strategies continue to work for us," Macy's CEO Terry J. Lundgren said in a press release.
Meanwhile, J.C. Penney investors punished the stock after the company merely noted that it was "pleased" with its holiday performance but refrained from releasing any numbers.
We saw November's retail sales revised down, and we'll see if December's numbers are revised down.
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