NEW YORK — Those infamous “tough comparisons” aren’t hitting retail same-store sales just yet: January comps came in stronger than expected.

And it seems retailers such as Neiman Marcus and American Eagle Outfitters Inc. knew when to hold ’em and when to fold ’em regarding post-holiday merchandise markdowns, resulting in January comps gains of 12.2 and 22 percent, respectively.

Other winners include Bebe, Christopher & Banks, and Talbots, which had same-store sales increases of 29.3, 19 and 13.4 percent, respectively.

The strong results came despite a weekend blizzard that shut down stores and shopping malls in the Northeast and Midwest in the last half of the month. Gift card redemption was cited as one reason for the robust results.

Among the 50 retailers tracked by WWD, 35 posted positive January comps, while 15 said comps fell into the red. The specialty sector was the clear winner with a 5.3 percent average jump in comps. The mass merchants showed an average gain of 4.5 percent, thanks in part to a 9.4 percent rise in Target Corp.’s same-store sales, while the department store sector came in with a 2.5 percent increase.

The Goldman Sachs Retail Composite Index experienced an overall 2.8 percent increase in January same-store sales among the retailers it tracks, which compared with a 5.9 percent rise in January 2004.

“Consumers came out in force redeeming their gift cards and taking advantage of winter clearance sales, giving retailers a better-than-expected sales month,” said Mike Niemira, chief economist and director of research at the International Council of Shopping Centers, in a written statement. “Despite the fact that January is typically a clearance month, these results indicate that consumers are still in a positive spending mood.”

As the product transition to spring assortments begins, however, experts have guarded optimism in regard to spring sales trends. While several retailers said consumers are already reacting positively to the season’s first batch of goods, ongoing — and possibly overblown — concern resides in the fact that comp-store sales, or sales at stores open at least a year, in February and March face the hardest comparisons of 2005 with the prior year, according to data from the ICSC.

This story first appeared in the February 4, 2005 issue of WWD. Subscribe Today.

Moreover, analysts are concerned that retailers can’t top the newness and excitement that surrounded spring 2004 merchandise, which many see as the beginning of luxury’s reign.

“What I haven’t seen yet is that kind of standout [spring] trend. Last year, you had lot of style and color coming off of a pretty long period of not very exciting products,” said Chris Donnelly, a partner in Accenture Inc.’s retail and consumer goods practice.

Meanwhile, upward revisions to fourth-quarter earnings estimates were common among the retailers that reported strong comps Thursday, such as J.C.  Penney Co. and American Eagle, based on both stronger-than-expected full-price selling of spring merchandise and robust sales of marked-down goods.

Despite January’s strong comps —which were up against an aggregate 6 percent last year, according to the ICSC — harder year-over-year comparisons remain a focus for the retail industry.

It’s also a source of contention for industry analysts. Some say retailers use the strength of the prior year’s results as an excuse for the current month’s weakness. According to Annette McEvoy of the retail consultancy that bears her name, however, these so-called “harder comparisons” will fail to negatively impact sales if retailers are spot-on with hot apparel trends.

“Always superior execution can overcome the harder comparisons,” she said, adding that this spring “there’s going to be a limit as to what customers are going to spend in each [retail] channel.…It’s more of a market share movement dynamic versus some major new growth initiative.”

Still, the connection is hard to deny in some cases. For example, harder comparisons appeared to have a big impact on January results for May Department Stores, while others, such as Neiman Marcus, Target Corp. and Nordstrom, posted gains on top of the prior year’s gains.

Then there’s Kohl’s Corp. and Gap’s Old Navy division, which had relatively easy comparisons with last year, but January comps still came in somewhat weak.

Overall, comp results that had been strong during the holiday season remained strong in January. McEvoy said retailers that showed a new and fresh direction in their merchandise offerings were the clear winners of the post-holiday selling season, including Abercrombie & Fitch and Talbots. The latter, said McEvoy, was able to turn around sales in January by abandoning a previous strategy of offering apparel in colors that were too bright before and during Christmas.

Talbots said on a recorded sales call that its 13.4 percent January comp advance was driven primarily by markdown selling. Yet, it also saw “a healthy increase of regular price selling of transitional spring merchandise,” such as casual separates like jackets and denim, as well as silk scarves and silver jewelry.

“They’re satisfying their pent-up demand from people who might have left,” McEvoy said of Talbots.

The company also tightened its fourth-quarter earnings-per-share estimate to 28 to 29 cents a share, versus a prior projection for 27 to 31 cents. Analysts’ consensus is 29 cents.

Shares of Talbots ended Thursday’s session up 4.1 percent at $29.04 while shares of Abercrombie surged 10.4 percent to $55.

As for Gap, two of the company’s three segments posted negative January comps. The company said on a recorded call Thursday that early selling of spring merchandise at Gap has been weaker than expected, while comp store traffic at Old Navy was down 5 percent in January. The company expects to earn 36 to 38 cents a share in the fourth quarter, versus analyst expectations for 37 cents.

In the mass merchant sector, Target was a big standout, posting a 9.4 percent pop in same-store sales from continuing operations, citing strength in shoes, jewelry and accessories, holiday merchandise and pharmacy sales.

The company, however, said in a press release that changes to two accounting metrics will pull down fourth-quarter earnings results by 6 to 7 cents a share. Last month, Target said earnings would come in below analysts’ then-consensus of 94 cents due to heavy holiday promotions. The Wall Street consensus is now for 91 cents in the quarter.

January Same-Store Sales

DEPARTMENT STORES

Jan. 2005 %Change

Dec. 2004 %Change

Nov. 2004 %Change

Oct. 2004 %Change

Bon-Ton
6.6
6.6
5.4
-5.2
Dillard’s
3
1
-3
-5
Federated
-0.4
2.3
-1.4
4
Gottschalks
0.9
0
-8.1
-1.9
Kohl’s
-1.6
3.1
0
6
May Co.
-7.2
-3.5
-7.9
-2.2
Neiman Marcus
12.2
10.8
8.4
13.6
Nordstrom
8.8
9.3
3.1
11.5
J.C. Penney (dept. stores)
3.3
-1.2
12
2.1
Saks Dept. Store Group
-0.9
2.8
-0.6
5
Saks Fifth Ave. Enterprises
3
12.1
6.8
3.6
Sears Roebuck (U.S. stores)
0.8
-3
2.8
1.9
Stage Stores
3.7
3.1
6
1.8
Average:
2.5
3.3
1.8
2.7
SPECIALTY CHAINS
Abercrombie & Fitch
17
10
2
11
Aeropostale
2.5
0.5
4.1
9.1
American Eagle (U.S. stores)
22
32.8
24.3
31.7
Ann Taylor
-3.6
-1.5
-8.3
6.2
Banana Republic
7
-2
-3
3
Bebe
29.3
28
23.2
30.6
Buckle
8.6
4.4
-0.4
8.4
Cache
2
7
3
1
Cato
4
2
3
5
Charming Shoppes
-3
-3
3
6
Chico’s FAS
8.2
18.6
8.6
9.3
Christopher & Banks
19
-7
-3
7
Claire’s
7
5
3
9
Deb Shops
-0.1
5
-1.8
3.7
Dress Barn
1
2
4
-4
Gap (U.S. stores)
-6
2
1
7
Goody’s Family Clothing
-3.4
0.7
-0.6
-1.7
Guess
4.4
5.6
0.5
6.2
Hot Topic
-2.5
-6.2
-8
-3.8
Limited Brands
9
2
-5
1
Mothers Work
-3.7
-1.9
-11.6
1
New York & Company
1.2
-5
-0.4
4.1
Old Navy
-13
-1
-5
4
Pacific Sunwear
8.1
5.3
2.7
8.5
Talbots
13.4
2.8
-0.5
4.7
United Retail
8
6
11
11
Walgreen
10
4.2
11.4
8.1
Wet Seal
8.2
-11.8
-19.5
-15.5
Wilsons
-1.1
-4.7
-3.1
9.4
Average:
5.3
3.4
1.2
6.2
MASS MERCHANTS
Family Dollar
5.2
4
5.2
0.9
Retail Ventures
2.9
-0.7
-5.3
-0.2
Ross Stores
-1
2
-2
4
ShopKo
-1.7
-5.3
-4.8
-3.1
Stein Mart
13.1
10.3
2
12.3
Target (discount stores)
9.4
5.1
3.2
6
TJX
5
6
2
7
Wal-Mart (discount stores)
3.2
2.6
0.3
2.4
Average:
4.5
3
0.1
3.7
Tally:
Up
35
34
27
40
Flat
0
1
1
0
Down
15
15
22
10
Total
50
50
50
50

SOURCE: COMPANY REPORTS