Inclement weather and thrifty consumers took their toll on January sales.
Providing a quarterly update, Kohl’s Corp. lowered its fourth-quarter earnings guidance to about $1.53 a diluted share, from earlier estimates of a range of $1.59 to $1.74, as weakness in January led it to a 2 percent same-store sales decline in the November-to-January period. Comps were up 0.8 percent during November and December.
“January sales were significantly lower than planned as a result of lower traffic and low levels of clearance merchandise,” the company said. “Unanticipated expenses in servicing its e-commerce business led to higher-than-expected costs for the quarter.”
The small sample of retailers continuing to report comparable sales on a monthly basis generally checked in with negative results, although two of the biggest – L Brands Inc. and Costco Wholesale Corp. – reported larger-than-expected increases.
L Brands lifted its fourth-quarter guidance after recording a 9 percent increase in comps for the month, including a 10 percent burst at Victoria’s Secret. However, the firm noted that its merchandise margins were down “significantly to last year, driven by deeper discounting and extended sale durations across our businesses.” Year-end inventories were up 9 percent per square foot.
Analysts polled by Thomson Reuters had expected L Brands to report a comp increase of 0.5 percent, making for a substantial “beat." Costco reported a 5 percent increase in U.S. comps, excluding fuel, versus an expected boost of 4.8 percent.
Gap Inc. will report January results after the close of the markets today.
Stein Mart Inc., expected to post a flat comp, instead reported a 0.7 percent decline, lowering its fourth-quarter comp growth to 3.1 percent. Jay Stein, chief executive officer, said, “Our January sales were clearly impacted by the severe weather throughout most of the country. Factoring this out, our sales results for January were consistent with our performance through year-to-date December.” Sales grew 3.9 percent on a comp basis during the first 11 months of the fiscal year.
Teen retail’s struggles continued during the month, with both The Buckle Inc. and Zumiez Inc. falling well short of estimates with respective declines of 6.6 and 7.6 percent. Buckle had been expected to post a 1.2 percent pullback and Zumiez a 3.5 percent contraction.
A number of stores are expected, like Kohl’s, to provide quarterly updates for investors today. The Wet Seal Inc. said its fourth-quarter comp declines hit double-digit levels in the quarter, with corporate comps down 16.5 percent, the Wet Seal brand down 15.4 percent and the Arden B unit down 25 percent.
However, Ann Inc. said that its fourth-quarter comps expanded 3 percent with a 1 percent decline at the Ann Taylor brand offset by 6 percent growth at Loft.
“The company’s sales, gross margin and EPS for the fourth quarter of 2013 will be higher than the fourth quarter of 2012,” said Kay Krill, president and ceo of Ann Inc. “However, soft traffic and tepid consumer spending across the industry negatively impacted us, particularly in factory outlet centers and geographic regions that experienced extreme winter weather.”
She added that the company began the new fiscal year this month with “clean inventories and fresh spring product at both brands.”