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Shoppers Flocked to Off-Pricers in December

Dillard's Inc.

NEW YORK - Christmas stocking were filled, it seems, with value-priced gifts from off-price retailers, leading Ross Stores and TJX Cos. to ring up the strongest comp store sales results in December.
In both cases, comps beat expectations.
     Pleasanton, Calif.-based Ross Stores' vice chairman and ceo, Michael Balmuth, said his company is "very pleased with our much stronger than expected sales gains in December," noting Ross' 9% comp jump reflected "value-seeking shoppers continue to respond favorably to the wide array of compelling name brand bargains throughout our stores. Juniors and shoes were the best-performing merchandise categories, while geographic trends were broad-based."
     Similarly, Framingham, Mass.-based TJX Cos. was "extremely pleased with our December comp sales increase of 8%, which significantly exceeded our expectations," remarked ceo Carol Meyrowitz.
     Not surprisingly, she said TJX is convinced that "value remains critically important to consumers, and that our great values, brands, and gift-giving selections drove large increases in customer traffic during the month."
     TJX, she continued, made "a strategic decision to price aggressively in order to reinforce our value position in a very promotional retail environment, and to clear cold weather apparel in this unseasonably warm winter ... I am also delighted that sales were strong at every division and that both of our international businesses performed very well."
     As a result, TJX is entering 2012 with "very lean inventories and the flexibility to ship fresh merchandise with great values to our stores," Meyrowitz summed.
     Close behind with a 6.2% comp gain was Cincinnati-based Macy's. While not an off-pricer, the department store is "solidly on track to exceed our expectations for same-store sales in the fourth quarter," said Terry Lundgren, chairman, president and ceo.

WINNERS AND LOSERS

Same-store sales % change

WINNERS

Ross Stores

9.0

TJX Cos.

8.0

Macy's Inc.

6.2

Costco Wholesale Corp.

6.0

Dillard's Inc.

4.0

Target Corp.

1.6

JCPenney Co.

0.3

LOSERS

The Bon-Ton Stores

(0.7)

Fred's Inc.

(0.4)

Duckwall-Alco

(0.3)

Kohl's Corp.

(0.1)

 September

     Little Rock, Ark.-based Dillard's has been enjoying stronger sales and comp trends in recent months, and December was no different. The department store chain posted the fifth strongest comp results - up 4.0% - among the 12 key retailers tracked monthly by HTT.
     Driving the gain were sales in shoes and cosmetics, both of which were significantly above trend during the 36-day holiday selling period ended Jan. 1. However, sales in the home and furniture category were significantly below trend.
     A 1.6% comp was "below expectation" for Target Corp. in Minneapolis, as growth in the grocery and beauty categories offset softness in electronics and music, movies and books, said Gregg Steinhafel, chairman, president and ceo.
     Target's sales and traffic were strongest in the week leading up to Christmas as shoppers waited to shop for last-minute gifts, he added.
     "In 2012, we'll continue to pursue initiatives designed to deliver compelling value and a superior shopping experience against the backdrop of continued slow and volatile economic growth," Steinhafel said.
     Children's apparel and women's accessories were the top performing merchandise divisions for Plano, Texas-based JCPenney in December. But not good enough to keep the company from generating a 0.3% comp decline
     Still, while overall sales and traffic were softer than anticipated, the company noted better trends in its stores during the week leading up to Christmas and increases in traffic and orders on jcp.com during the key holiday shopping periods of the week after Thanksgiving and the week before Christmas.
     Only one retailer on HTT's list maintained flat comps. Jacksonville, Fla.-based Stein Mart said its ladies' casual sportswear, accessories and intimate apparel exceeded company trend in December, while ladies' boutique and career sportswear as well as home textiles, experienced weaker trends.
     Four major retailers on HTT's monthly roundup - Kohl's, Bon-Ton reported comp declines - but each was down 1% or less. For Menomonee Falls, Wis.-based Kohl's, its 0.1% comp dip in December had a silver lining - it was better than the 6.2% comp decline it recorded in November.
     Another positive note for the period: "Our e-commerce business increased 48% over last year and we remain on track to hit $1 billion in e-commerce sales for fiscal 2011," said Kevin Mansell, chairman, president and ceo.
The hardest hit in December was York, Pa.-based Bon-Ton.
     "Cold-weather categories, which are highly profitable and represent approximately 25% of our business in December, were down mid-teens on a percentage basis," explained Tony Buccina, vice chairman, president - merchandising. "December sales and margin were negatively impacted by unseasonably mild weather in all our markets throughout the month."
     Bon-Ton's best performing businesses included hard home, cosmetics, fine jewelry, children's and better apparel; its poorest performing businesses, aside from cold-weather merchandise, were intimates, moderate traditional men's and ladies' apparel and moderate traditional handbags and shoes.
     "Our strategic growth initiatives continue to do well in our pilot stores, including sales growth in updated merchandise, which again significantly outperformed total company in sales growth as it has since mid-September," Buccina said. "Additionally, our December ending inventory is fresher than last year, reflecting the aggressive markdowns taken during the month."
     The Johnson Redbook Same-Store Sales Index for December was up 3.5%. Among the retailers tracked by Redbook - which includes department stores, discounters, and apparel specialists - 67% posted comps gains and 32% posted declines.

DECEMBER SALES FOR KEY RETAILERS

Five weeks ended December 31, 2011 (dollar amounts in millions) a

 

2011 SALES

2010 SALES

TOTAL % CHG.

SAME-STORE % CHG.

The Bon-Ton Stores Inc.

$505.2

$510.8

(1.1)

(0.7)

Costco Wholesale Corp. b

$10,050.0

$9,190.0

9.0

6.0

Dillard's Inc. c

$1,108.7

$1,078.9

3.0

4.0

Duckwall-ALCO Stores Inc.

$66.8

$65.6

1.7

(0.3)

Fred's Inc.

$213.0

$210.5

1.0

(0.4)

J. C. Penney Company Inc.

$2,886.0

$2,955.0

(2.3)

0.3

Kohl's Corp.

$3,246.0

$3,192.0

1.7

(0.1)

Macy's Inc.

$4,925.0

$4,618.0

6.6

6.2

Ross Stores Inc.

$1,149.0

$1,008.0

14.0

9.0

Stein Mart Inc.

$166.0

$163.0

(0.2)

0.0

Target Corp.

$10,138.0

$9,882.0

2.6

1.6

The TJX Companies Inc.

$3,300.0

$3,000.0

8.0

8.0

48 WEEKS

 

2011 SALES

2010 SALES

TOTAL % CHG.

SAME-STORE % CHG.

The Bon-Ton Stores Inc.

$2,710.3

$2,800.4

-3.2

(2.8)

Costco Wholesale Corp. d e

$33,180.0

$29,780.0

11.0

6.0

Dillard's Inc.

$5,835.5

$5,653.9

3.0

4.0

Duckwall-ALCO Stores Inc.

$455.3

$435.2

4.6

3.2

Fred's Inc.

$1,747.0

$1,713.0

2.0

0.7

J. C. Penney Company Inc.

$16,459.0

$16,855.0

(2.4)

0.7

Kohl's Corp.

$17,962.0

$17,566.0

2.3

0.6

Macy's Inc.

$25,070.0

$23,693.0

5.8

5.4

Ross Stores Inc.

$8,125.0

$7,425.0

9.0

5.0

Stein Mart Inc.

$1,100.3

$1,118.7

(1.6)

(1.0)

Target Corp.

$63,858.0

$51,522.0

4.0

2.9

The TJX Companies Inc.

$21,800.0

$20,600.0

6.0

4.0

a. Reporting periods vary among key retailers.

b. Costco’s December comp results are for the U.S. division and do not include the positive impacts of inflation in gasoline prices or the “slightly negative” impact from foreign currencies. Including those impacts, comps for the month were up 7.0% in the U.S. division, 9.0% in the international division, and 7.0% for the total company.
c. Dillard’s results reflect merchandise sales for the 36 days ended January 1, 2012.
d. Because it is on a different fiscal calendar than the other key retailers on this list, Costco’s year-to-date sales and comp results reflect the past 18-week period.
e. Costco’s year-to-date comp results are for the U.S. division and do not include the positive impacts of inflation in gasoline prices or the “slightly positive” impact from foreign currencies. Including those impacts, comps for the month were up 6.0% in the U.S. division, 10.0% in the international division, and 7.0% for the total company.

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