NEW YORK — Improved mall traffic late in the month propelled Nordstrom and three specialty retailers to same-store gains as the first December same-store sales results trickled in on Wednesday.
This story first appeared in the January 9, 2003 issue of WWD. Subscribe Today.
Following Cache and Mothers Work, which early in the day reported that December comparable-store sales rose 11 percent and 3.4 percent, respectively, late in the day Nordstrom reported a 3.4 percent gain in comps for the month, Hot Topic was up 10.6 percent and Aeropostale managed a 0.3 percent pickup. However, beleaguered off-pricer Factory 2-U Stores retreated 3.9 percent and American Eagle Outfitters declined 5.3 percent.
More dramatically, Guess Inc. reported that its comps for the month were off 1.1 percent, with a 3.5 percent rise in sales at outlets offset by a 2.7 percent fall in sales at full-price stores. The Los Angeles-based firm warned that markdowns took a heavy toll on fourth-quarter margins and said it expects to report earnings for the quarter ended Dec. 31 of 1 cent to 3 cents a share. When Guess released third-quarter results in October, it said it expected to earn 10 cents to 13 cents per diluted share, before 15 cents to 18 cents a share in restructuring charges. Guess now expects to close the year with a loss of 12 cents to 14 cents per share. In the fourth quarter of 2001, the firm recorded net income of 3 cents a diluted share with earnings for the year coming in at 14 cents a share.
The firm said its markdowns paid off and contended it is entering 2003 with low inventory levels.
Other publicly held retailers are expected to report December results today, and expectations are for comps to come in at or slightly below plan in most cases.
Nordstrom said the designer, bridge and contemporary segments of women’s apparel comped higher, as did cosmetics, accessories, women’s activewear, shoes and children’s apparel.
Cache Inc.’s 11 percent increase exceeded its plan for a mid-single-digit increase. Brian Woolf, Cache’s chairman, said the December sales increase was primarily driven by regular price assortments. “The assortment stood on its own in terms of giving customers what they wanted,” he said. “Clearly, a niche customer is out there who does not respond to price, but to fashion trends.”
For the fourth quarter, comps rose 8 percent while total sales gained 12.3 percent to $58.6 million, compared with $52.2 million.
Hot Topic’s 10.6 percent comp hike last month exceeded plan and led the retailer to forecast fourth-quarter earnings to a range of between 47 cents and 48 cents a diluted share, compared with the current consensus estimate of 46 cents and the 38 cents reported in last year’s quarter.
Mothers Work, a maternity apparel retailer, said that with its 3.4 percent comp increase in December, the comp increase for the November-December period was 5.4 percent.
Rebecca Matthias, president and chief operating officer, said in a statement, “We have continued to realize meaningful gross margin increases over last year, primarily due to our success at reducing product costs through our aggressive sourcing initiatives.”