Published January 03, 2013
Costco Wholesale Corp (COST) had a strong run-up to Christmas, but other chains posted disappointing December sales on Thursday, as the economy took a toll on shoppers in the most important quarter of the year for retailers.
Among the chains reporting December sales at stores open at least a year, Costco stood out early with growth that topped expectations. Limited Brands Inc's sales rose less than anticipated, marking a rare miss for the owner of the Victoria's Secret (LTD) chain.
Wet Seal Inc's sales fell even more than analysts expected, leading it to expect a fourth-quarter loss at or near the bottom of its prior forecast.
Overall, analysts looked for 3.3% same-store sales growth for December across 17 chains, down from 4.2% growth in December 2011, according to Thomson Reuters I/B/E/S.
Same-store sales rose a disappointing 1.6% in November. In December 2008, same-store sales fell 3%, according to Thomson Reuters I/B/E/S.
The holiday season was never expected to be stellar, but even the single-digit growth anticipated by chains and analysts came under pressure as Superstorm Sandy, the ever-present headlines about the ``fiscal cliff'' and the Connecticut school shootings affected consumers' moods.
Costco posted a 9% rise in December same-store sales, topping estimates for a 6.5% increase, boosted by an additional sales day in the reporting period. Higher fuel prices and a weaker dollar also helped.
Excluding the effects of fuel sales and foreign exchange, Costco posted an increase of 8%.
While Limited often tops expectations, in December its same-store sales rose 3% versus expectations of a 4.5% increase.
Wet Seal, which caters to teens, said same-store sales fell 9.7%. Analysts predicted the chain would have the weakest sales of any of the 17 chains reporting, but only anticipated a 5% decline.
Wet Seal now expects its fourth-quarter results to come in at or near the bottom of its forecast of a loss of 3 cents to 6 cents per share.