Friday, 12 October 2007

Retailers report sluggish September sales

Retailers post worse than expected monthly sales

Given housing concerns and credit worries, U.S. retailers could be headed for their worst holiday season in five years, according to the National Retail Federation, the world's largest retail-trade association.

Retailers' sales at stores open at least a year, a key retail performance measure, rose 1.7% last month -- the worst in five months, and below the average monthly sales gain in each of the past four years, according to the International Council of Shopping Centers. ICSC earlier this week already had trimmed its estimate for same-store sales to a gain of 2%, from as much as 2.5%.

About two-thirds of retailers missed expectations, well above the norm of 44%, according to research firm Retail Metrics. Retailers across discount, department-store, apparel and teen sectors all missed analysts' forecasts, according to Thomson Financial.

A couple of points:
  • Measured in 'real' terms (ex-inflation) retail sales are probably down for the year.
  • There was a significant increase in the number of retailers missing forecasts.
  • Wal-Mart (WM) upped it's earnings forecast but missed sales expectations. How long can the world's biggest retailer continue to cut costs to offset sluggish top-line growth?