October Same-Store Sales Roundup: Mixed Message Before Holiday Shopping

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Includes: AAPL, AEO, ANF, ARO, GPS, JCP, JWN, KSS, M, SKS, TGT
by: Benzinga

By Jonathan Chen

Recently we got a slew of numbers from some of the biggest and largest names in retail, and the results were mixed, as consumers appear to be saving up for the holiday shopping season. This comes after strong back to school sales for the majority of retailers.

Gap Inc (NYSE:GPS) reported a 6% decline in its October same-store sales. Analysts expected a drop of 5.6%, but total October sales dropped 4%. In addition, the company also guided third quarter earnings above Wall Street estimates. It now expects third quarter earnings of 35-37 cents per share, versus estimates of 32 cents. Shares are currently up around 2.7% as of the time of this article.

On the high end, Saks Incorporated (NYSE:SKS) reported that October same-store-sales were up 1.8%. The company said that the strongest categories at Saks Fifth Avenue stores included women's contemporary sportswear and WEAR NOW (bridge) apparel, men's clothing, shoes, and handbags. Saks Direct performed well during the month. Sales rose from $649.6 million in 2010 to $678.6 million in 2011.

I spoke with retail analyst Brian Sozzi and he said that consumers are not responding to higher price points, especially in cosmetics. "They [Saks] pulled back on cosmetic promotions and yet the consumer did not respond to the higher price points. The consumer is looking for a deal if they can find, and if they don't get it, the consumer night hold off," Sozzi said.

Shares of Sak's were down around 3% Thursday afternoon on the back of the same-store-sales.

Nordstrom (NYSE:JWN) fell short of analyst estimates, coming in at 5.4% year-over-year for the month of October, versus estimates of 6.3%. Preliminary total retail sales were $749 million for October 2011. Nordstrom shares are off 67 cents to $49.90, down less than 2% in early Thursday trade.

J. C. Penney (NYSE:JCP) same-store-sales for October fell 2.6%. This comes despite the inclusion of Bill Ackman and Steven Ross on the board of directors.

Sozzi commented on J.C. Penney, expressing his disappointment. He said it was, "Another month of market share loss. When you see what Kohl's (NYSE:KSS) did, it does not bode well for J.C. Penney. I don't like the lack of momentum for J.C. Penney going into the holiday season."

The 108-year old company now has a new CEO, Ron Johnson, who came from Apple (NASDAQ:AAPL). He started November 1.

Among the teen retailers, Abercrombie & Fitch (NYSE:ANF) reported that October same-store-sales were up 7%, versus estimates of 6.4%. Despite that fact, shares plunged Thursday morning, down over 20%, as overseas growth is slowing, although domestic growth offset the international weakness.

Sozzi also had comments on Abercrombie, stating that he wants to see time elapse before stepping in. "I think what happened is a case of high expectations and it looks like American Eagle (NYSE:AEO) took back share in the quarter. I would not be buying on the weakness," Sozzi said.

Aeropostale (NYSE:ARO) reported third quarter earnings, as third quarter same-store-sales fell 9%. Despite this, the company did raise earnings guidance, going to 27 to 28 cents per share, up from the 9-15 cents per share it saw prior.

Macy's (NYSE:M) reported that October same-store-sales were up 2.2%, coming in at $1.842 billion, compared to $1.806 billion in 2010. Shares of Macy's were higher in mid Thursday trade.

Target Corp (NYSE:TGT) reported a 3.3% rise in its October same-store sales to $4.84 billion, up from $4.64 billion last year. However, analysts were expecting comparable-sales to rise 4.2%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.