U.S. shoppers were careful in January after their holiday spending, but retailers still managed to get their clearance items out the door, data reported Thursday showed.
Several major retail chains posted solid increases in January sales at stores open at least a year, including Target, Costco, the Limited and Saks Fifth Avenue. But sales decreased from a year ago at a handful of chains, including at the Gap and the teenage-oriented retailer Wet Seal, and many other chains missed analyst estimates.
Overall, retailers said their sales increased 4.2 percent on average from a year ago, according to Thomson Reuters, more than double analyst expectations of 2 percent.
“Consumers probably overextended themselves” in the holiday season, said Megan Donadio, a retail strategist at the consulting firm Kurt Salmon, “so January was a month of catch-up and credit card bills. We already had some great sales toward the end of December, so how much were people really going to go out and purchase in January?”
Of the 20 stores tracked by Thomson Reuters that had reported results by Thursday morning, about 60 percent beat analyst estimates and 40 percent missed.
Macy’s, which was expected to post a 3.5 percent increase, said its same-store sales had increased just 2.4 percent.
“Sales in January -- the smallest-volume month of the year -- were weaker than anticipated,” Terry J. Lundgren, chairman, president and chief executive of Macy’s, said in a statement.
He added that January was still the 26th consecutive month of same-store sales increases at Macy’s.
At Gap, sales decreased 4 percent from a year ago, better than projections of a 4.9 percent drop. Of the Gap’s four divisions, only Banana Republic posted an increase for January, of 6 percent. Gap brand fell 5 percent, Old Navy 6 percent and International 10 percent.
“January was largely clearance-based, and we’re pleased we successfully cleared holiday inventory,” Glenn Murphy, chairman and chief executive of Gap, said in a statement.
On the other end of the spectrum, Saks’ same-store sales grew 10.5 percent over January a year ago, well above the 6.2 percent analysts were expecting. Men’s clothing and accessories sold especially well, the company said.
Warm weather also hurt retailers that were trying to get coats and sweaters out the door, but it also gave them an early jump on spring. Many stores began selling spring merchandise at the end of the month.
J.C. Penney stopped reporting monthly same-store sales as it switched to a new pricing system that went into effect Wednesday. Under the new approach, rather than having artificially marked-up items that are continuously on sale, it will try three price levels: a regular everyday price, a special monthly price for seasonal items and a clearance price.
Deborah Weinswig, an analyst at Citigroup, looked at 10 national brands at Penney’s website versus Macy’s under the new prices. Overall, she found the items cost about 20 percent less at J.C. Penney.
