Retailers report solid gains for September
NEW YORK (AP) — Americans shopped in September, but only when they thought they were getting a deal.
The International Council of Shopping Centers said Thursday that revenue rose 5.5 percent in September as several retailers including Target, Limited Brands and Macy's had strong gains. Consumers were snagging big discounts and affordable luxuries during the month.
The revenue increases, which beat Wall Street estimates, leave uncertainty about whether retailers will have to offer more profit margin-busting deals to lure consumers into stores during the winter holiday shopping season.
"Bargains drove the month," said Ken Perkins, president of Retail Metrics, a research firm. "There were lot of deals to be had, and we expect to see that follow through the rest of the year."
The revenue gains at stores open at least a year — a key indicator of a retailer's health — come as merchants look for a sign of how consumers will spend during the winter holiday season that runs roughly from November through December. Although many retailers are reporting strong increases in September, concerns linger that shoppers who are fretting about high unemployment, a weak housing market and a turbulent stock market, will continue to look for the kind of bargains that could significantly eat away at retailers' profits.
In September, some stores that cater to the low- and middle-income customer posted solid results.
Kohl's Corp., which suffered a sales decline in August, bounced back with a better-than-expected 4.1 percent gain in revenue at stores opened at least a year. The mid-brow department store credited the sales bounce in part to its merchandising launch with celebrities Jennifer Lopez and Marc Anthony, the largest in its history. But Kohl's also had to step up discounting across the store to lure shoppers.
Cheap chic discounter Target Corp. reported a 5.3 percent revenue increase in September at stores open at least a year, marking the biggest increase since November 2007 when it recorded a 10.8 percent gain, according to Perkins. The September sales figure beat the 3.9 percent gain analysts polled by Thomson Reuters had expected. Results were buoyed by strong sales of groceries, beauty products and clothing. Target said shoppers spent more in stores and more browsers were converted into buyers during the month.
"We experienced strong sales results throughout the month and across a broad array of merchandise categories," said Gregg Steinhafel, chairman, president and chief executive in a statement.
Department stores also had strong gains. Macy's Inc., which runs department store chains Macy's and Bloomingdales, posted a 4.9 percent increase in revenue at stores opened at least a year, up slightly from the 4.4 percent increase analysts had expected.
"This underscores that our business remains on track, despite the persistently negative macroeconomic news," said Terry J. Lundgren, chairman, president and chief executive officer of Macy's in a statement. "We are feeling quite confident that we will continue to gain market share as we head toward the holiday selling season."
In the luxury sector, Saks Inc. reported a 9.3 percent increase, better than the 6.5 percent gain expected by analysts. Nordstrom Inc. posted a 10.7 percent surge last month. That well exceeded the 5.2 percent prediction.
Among mall-based retailers, Limited Brands Inc., announced a hefty 11 percent increase in September at stores open at least a year, as shoppers treated themselves to little luxuries like lotions and lingerie at its Victoria's Secret and Bath and Body Works mall stores. That's much higher than the 4.6 percent gain analysts had been expecting.
But Gap reported that revenue at stores opened at least a year was down 4 percent. Analysts had expected a 3.8 percent decline. The weakness was across all divisions, including its namesake brand, low-price Old Navy and Banana Republic.
"While there were some bright spots across our brands and business units, we're clear and focused on the steps necessary to improve our business performance going forward," said Glenn Murphy, Gap's chairman and chief executive officer in a statement.