Retailers report solid gains for September
NEW YORK (AP) — Americans shopped in September, but they weren't paying full price.
Several retailers including Target, Limited Brands and Macy's reported strong increases in revenue for the month that beat Wall Street estimates as consumers snagged discounts on clothing and other back-to-school merchandise despite the down economy. That leaves uncertainty about whether retailers will have to offer more profit margin-busting deals to lure consumers into stores during the winter holiday shopping season.
"Bargains drove the month," said Ken Perkins, president of Retail Metrics, a research firm. "There were lot of deals to be had, and we expect to see that follow through the rest of the year."
The revenue gains at stores open at least a year — a key indicator of a retailer's health — come as merchants look for a sign of how consumers will spend during the winter holiday season that runs roughly November through December. Although many retailers are reporting strong increases in September, concerns linger that shoppers who are fretting about high unemployment, a weak housing market and a turbulent stock market will continue to look for the kind of big bargains that could significantly eat away at retailers' profits.
Target Corp. reported a 5.3 percent revenue increase in September at stores open at least a year, beating the 3.9 percent gain analysts polled by Thomson Reuters had expected. Results were buoyed by strong sales of groceries, beauty products and clothing. Target said shoppers spent more in stores and more browsers were converted into buyers during the month.
The cheap chic discounter also likely benefited from a surge of shoppers during the month who flocked to its stores and web site for its exclusive limited-time only Missoni by Target line of clothing, home furnishings and other doodads. The 300-piece collection created by Italian designer Missoni, featured stationery for $2.99 up to $599.99 patio furniture at a fraction of the cost of the designer's original works that can go for $595 to $1,500 and more.
"We experienced strong sales results throughout the month and across a broad array of merchandise categories," said Gregg Steinhafel, chairman, president and chief executive in a statement.
Macy's Inc., which runs department store chains Macy's and Bloomingdales, posted a 4.9 percent increase in revenue at stores opened at least a year, up slightly from the 4.4 percent increase analysts had expected.
"This underscores that our business remains on track, despite the persistently negative macroeconomic news," said Terry J. Lundgren, chairman, president and chief executive officer of Macy's in a statement. "We are feeling quite confident that we will continue to gain market share as we head toward the holiday selling season."
Among mall-based retailers, Limited Brands Inc., announced a hefty 11 percent increase in September at stores open at least a year, as shoppers treated themselves to little luxuries like lotions and lingerie at its Victoria's Secret and Bath and Body Works mall stores. That's much higher than the 4.6 percent gain analysts had been expecting.
But not every retailer posted gains. Gap reported that revenue at stores opened at least a year was down 4 percent. Analysts had expected a 3.8 percent decline. The weakness was across all divisions, including its namesake brand, low-price Old Navy and Banana Republic.
"While there were some bright spots across our brands and business units, we're clear and focused on the steps necessary to improve our business performance going forward," said Glenn Murphy, Gap's chairman and chief executive officer in a statement.