Retailers Hit Hard by Sandy and Weak Consumer

Target (NYSE:TGT), the second largest department store in nation, posted a 1.0 percent decline in same-store sales. Estimates called for a 2.1 percent increase. “November sales were below our expectations, reflecting weaker-than-planned sales performance in the first two weeks combined with stronger sales growth across all channels later in the month,” said Gregg Steinhafel, chairman, president and chief executive officer of Target Corporation. “Profitability for the month remained on plan, reflecting our efforts to balance thoughtful price investments in an intensely competitive environment with our continued focus on driving sales.” Wal-Mart (NYSE:WMT), the largest retailer in the world, does not report monthly figures.

Other retailers such as Gap (NYSE:GPS) and Nordstrom (NYSE:JWN) also missed estimates by announcing a decrease in November same-stores sales. Kohl’s (NYSE:KSS) logged a whopping 5.6 percent decline in sales, missing estimates for a 1.9 percent gain. Shares of the Wisconsin-based retailer plunged more than 9 percent on Thursday. On the positive, Costco Wholesale (NASDAQ:COST) and Limited Brands (NYSE:LTD) both beat expectations with same-store sales growth of 6.0 percent and 5.0 percent, respectively.

Although many analysts and retailers are upbeat on the holiday season, due to a strong showing over the Black Friday weekend, the latest gross domestic report from the Commerce Department shows that consumers are still scaling back. In the third quarter, household purchases climbed at a meager 1.4 percent pace, the weakest gain in over a year and lower than the 2.0 percent increase previously reported. The revised figure was also lower than any of the 18 estimates made by economists, with the median forecast being 1.9 percent.

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