Companies and Brands
Tempering of January Same-Store Sales, Still Strong 2011 (LULU, VRA, ZUMZ, TIF, CWTR, AEO, TLB, PSUN)
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Blame it in part on the weather. The major gain in same-store sales that has been seen in recent months may be coming to an end. There were several factors to blame, and Retail Metrics has outlined several key issues that will curb expectations on those sales gains that were so common in 2010. The weather is one issue, but the easy comps and gas prices might have some of the blame here too.
January saw multiple snow storms in the Northeast, South and Midwest, all a net drag on sales even if the weather did facilitate more close-out sales. Retail Metrics also pointed out that gas prices were up 15% from a year ago and up another 3% from December; food prices have also been climbing. The most recent months over the last year have seen very easy comparable sales figure bogeys but Retail Metrics pointed out that January likely faces the toughest comparable store sales going all the way back to April of 2008.
The interesting aspect of the holiday season is unlike what we have seen for the last two or three years. Clearance merchandise was limited in January due to strong Holiday sales and strong sales in December and in November are expecte3d to have pulled out sales from the January component of the fourth quarter. More good news seems to still be adding support for retail despite the cautious January headline expectations due to higher consumer confidence and strong leading economic indicators. There is another silver lining here: January is the least important month of the fourth quarter in retail with only 23.5% of the quarter a year ago.
Some of Retail Metrics’ expected key winners for January/Quarter same-store sales are as follows:
Some of the Retail Metrics’ expected key losers for January/Quarter same-store sales are as follows:
The new Retail Metrics January Same Store Sales Index is down another 1- basis-points and is now expected to come in at roughly +2.6% for the month.
JON C. OGG
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