Retail gains are October surprise

November 04, 2005|By MARKETWATCH

CHICAGO - The nation's retailers posted surprisingly strong October sales yesterday, powered by better merchandising and pentup consumer demand after a string of big hurricanes.

Overall, the industry recorded a 4.4 percent increase in same-store sales, the closely watched gauge of stores open more than a year, according to the International Council of Shopping Centers.

"This is great stuff," said Richard D. Hastings, retail analyst at Bernard Sands LLC. "It shows again that you can't bet against the consumer. All the stories about higher gas prices and inflation are widely overblown."

As calculated by Thomson Financial, the aggregate of sale store sales climbed 4.3 percent compared with a forecast of 3.6 percent.

Teen-wear and luxury retailers turned out robust - even stellar - sales. On Wall Street, shares of most retailers rose higher after the reports.

Leading the pack was Abercrombie & Fitch Co. The teen-oriented retailer's 31 percent leap in same-store sales was more than double the average forecast as compiled by Thomson Financial. The retailer's stock gained $2.42, or 4.4 percent, to close $56.27.

Wet Seal Inc., which sells casual women's clothing, recorded a 47 percent increase in same-stores sales, handily beating the 32.4 percent average forecast of analysts surveyed by Thomson Financial.

Wal-Mart Stores Inc. posted a 4.3 percent increase, matching expectations, driven by higher receipts and food sales. The world's largest retailer forecast strong results in November.

Costco Wholesale Corp. said same-store sales rose 10 percent - higher than the 7.9 percent that Wall Street was looking for - and Target Corp. turned out a 5.7 percent increase that outpaced estimated growth of 4.7 percent.

Chico's FAS again proved that its strategies were working, tallying a 17.9 percent increase in same-store sales that were far better than the average forecast of 10.1 percent growth.

Michael P. Niemira, chief economist at the International Council of Shopping Centers, said last month's sales were helped by at least three hurricanes this year: Katrina, Rita and Wilma. Pent-up demand in the aftermath of Katrina and Rita helped on one end, while stocking up ahead of Wilma drove sales on the other, he said.

With one notable exception, the department-store segment performed well in October, led by Dillard Department Stores.

The exception was Federated Department Stores Inc., which blamed hurricanes for missing expectations with a decline in same-store sales of 0.7 percent, compared with expectations of 0.9 percent.

Dillard stunned analysts with an 8 percent gain. Its same-store sales growth had been expected to be 0.2 percent.

Nordstrom Inc. delivered its usually strong performance, knocking out a same-store sales increase of 6.4 percent that was above a 3.9 percent estimate.

Gap Inc., which has reported a string of disappointing numbers, eked out better-than-expected results. Same-store sales declined 5 percent, instead of the drop of 5.3 percent predicted.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.