Gap Inc. didn’t get any holiday cheer.

While the few retailers still reporting same-store sales displayed results that weren’t as bad as expected, Gap wasn’t one of them. The San Francisco-based retailer, which reported same-store sales after the stock market closed, registered December comps that were down 5 percent, compared to a 1 percent increase in December 2014. By brand on a global basis, Gap posted a 2 percent comps decline on top of a 5 percent drop a year ago; Banana Republic was down 9 percent versus flat comps a year ago, and Old Navy — once the standout division in the group — was down 7 percent against an 8 percent gain the year before.

Gap said net sales for the five weeks ended Jan. 2 fell 4 percent to $2.01 billion from $2.10 billion in the same year-ago period. It said that on a constant currency basis, December net sales fell 3 percent compared with a year ago. Gap said current year foreign exchange rates were applied to both current year and prior year net sales in calculating the change in constant currency to enhance the visibility of underlying sales trends, while excluding the impact of foreign currency exchange rate fluctuations.

The company didn’t comment on holiday sales results, although Sabrina Simmons, its chief financial officer, said, “As we bring the holiday season to a close, we look forward to delivering new spring collections across our brands.”

Although Gap’s shares rose 5.7 percent to $26.74 on the New York Stock Exchange, they plunged 7.6 percent to $24.72 in after-hours trading.

While comps dropped at other retailers, most outperformed expectations.

L Brands Inc. posted a gain of 8 percent instead of the expected 4.9 percent gain in consolidated comps. It’s Victoria’s Secret division posted an 8 percent gain, while its Bath & Body Works was up 6 percent. Each was expected to report same-store sales gains of 4.3 percent and 4.5 percent, respectively, according to Thomson Reuters.

R.W. Baird analyst Mark R. Altschwager said gains at L Brands was due to “continued strong performance at Pink, in lingerie at Victoria’s Secret and in seasonal collections at Bath and Body Works.”

Stein Mart eked out a comps gain of 1.8 percent on top of the 5.8 percent gain a year ago. Cato Corp. saw a 6 percent increase for December, although noted that the company’s year-to-date same-store sales were flat to last year. Both retailers were expected to report flat same-store sales for December, according to Thomson Reuters.

Signet Jewelers Ltd. said its same-store sales rose 4.9 percent, on top of a 3.6 percent gain a year ago. Mark Light, Signet’s chief executive officer, cited “broad-based success across strategic store brands, merchandise categories and selling channels.” Wells Fargo analyst Ike Boruchow said the strong holiday comp delivery was due to a “robust result from Kay [Jewelers], as well as comp accelerations at both Jared [The Galleria of Jewelry] and Zales.”

On the big-box front, Costco Wholesale Corp. saw a 1 percent gain in December comps on a consolidated basis, with its U.S. operation gaining 3 percent for the month. Those figures were boosted by a 4 percent comps gain in its U.S. business, excluding gas sales, and a 5 percent increased in its international business, also excluding gas sales.

According to Thomson Reuters, analysts were expecting comps to be down 8.8 percent for The Buckle, but the decline was down just 5.4 percent, while Zumiez, expected to report a 14 percent decline, saw comps falling 8.9 percent.

J.C. Penney Co. Inc. didn’t report comps for December, but did say that comps for the combined nine-week November and December period saw a 3.9 percent gain from last year. That gave it the retailer the confidence to reaffirm its full-year adjusted EBITDA target of $645 million. The company also said it “plans to generate positive free cash flow in fiscal 2015.”

Marvin R. Ellison, ceo of J.C. Penney, said, “Despite unprecedented warm weather that significantly affected apparel sales across the company, our focus on private brands, enhanced omnichannel execution and compelling gift-giving selection resulted in strong holiday sales.” Ellison noted the “accelerated comp sales improvement from November to December” and “record online sales for the company during the holiday season.”

In contrast Macy’s Inc. said Wednesday that comps for November and December fell by 5.2 percent. Terry J. Lundgren, Macy’s chairman and ceo, said, “The holiday selling season was challenging, as experienced throughout 2015 by much of the retailing industry….About 80 percent of our company’s year-over-year declines in comparable sales can be attributed to shortfalls in cold-weather goods such as coats, sweaters, boots, hats, gloves and scarves.” The company also said it would cut 4,000 jobs and shed 40 stores.

Brick-and-mortar analytics firm RetailNext Inc. said its monthly Retail Performance Pulse indicated stronger store performance in December than in preceding months in every key performance metric. Sales in December slipped 0.4 percent on a decline in store traffic of 8.5 percent, with November and December having a 2 percent decline in sales on a 6.4 percent drop in traffic.

According to Shelley E. Kohan, vice president of retail consulting at RetailNext, “The real news and somewhat of a surprise was the minimal sales drop in the month of December, well improved from a trend this year of around negative 7 percent.” She said retailers worked hard to make noticeable changes in the store environment, such as enabling technologies and having more knowledgeable sales associates. Those changes take into account the growing importance of the online channel, while recognizing the need to adjust the shopping experience in the physical channel.

According to RetailNext’s data, the strongest weeks in December for brick-and-mortar retailers were the week of Christmas and the week after, in which strong conversion resulted in sales increases of 10.8 percent.

load comments
blog comments powered by Disqus