Retailers enjoy first boost in 14 months
10/9/2009NEW YORK - The nation's stores saw their first sales gain in 14 months in September, a sign of life that fuels some hope for the holiday shopping season.
A late Labor Day and delayed school openings helped boost back-to-school sales in September. And stores' figures are looking better as compared with September, 2008, when spending plummeted amid the ballooning financial meltdown.
But analysts dissecting the figures say they feel encouraged by yesterday's reports even as they acknowledge that business remains weak and consumers tight-fisted.
"Let the retail recovery begin," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.
"This is the start of a better performance and better fundamentals."
The council and Goldman Sachs' preliminary tally registered an increase of 0.1 percent for September, compared with a 1 percent drop a year ago. While still tepid, the results mark the first gain since July, 2008, when the index was up 1.3 percent.
The tally is based on sales at stores opened at least a year and is considered a key indicator of a retailer's health. The tally excludes Wal-Mart Stores Inc., which stopped reporting monthly sales.
Stores had struggled with 13 straight months of sales declines, hitting the bottom in November, 2008, when sales plummeted 7.7 percent.
As stores announced results, J.C. Penney Co., Cincinnati-based Macy's Inc., and Target Corp. all reported smaller-than-expected declines in sales at stores open at least a year. Columbus, Ohio-based Limited Brands Inc., which runs Victoria's Secret and Bath & Body Works, and accessories chain The Buckle Inc. both posted increases for the month.
Still, industry worries remain high heading into the holiday shopping season because shoppers, many of whom were afraid to spend a year ago, are now grappling with rising job losses, reduced hours, or unavailable credit.
The unemployment rate is now 9.8 percent, up from around 7 percent last holiday season.
Target, J.C. Penney, American Eagle Outfitters Inc., and TJX Cos. raised their profit outlooks based on their better-than-expected performances.
Target said sales at stores open at least a year fell 1.7 percent, less than the 2 percent some analysts expected. Macy's had a 2.3 percent decline, less than the 4.6 percent drop analysts estimated. J.C. Penney had a 1.4 percent decline for September, lower than the 3.5 percent decline estimated.
TJX enjoyed a 7 percent gain, surpassing the 4.1 percent estimate.