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Mixed Bag Of December Results From Retailers, 8 Cos. Cut Their Earnings Outlook

 January 05, 2012 12:50 PM

The U.S. retailers' generally reported solid sales for December to end the year and holiday season on a high note, though disappointing results also came from big companies like J.C.Penney (JCP). The expected uptick from the retail sector has come on the back of National Retail Federation's lifting holiday sales forecast to 3.8 percent at $469.1 billion in December from the earlier forecast of 2.8 percent.

The December retail sales numbers comes on the heels of late shopping for Christmas, improved consumer sentiment, extended hours and marked down merchandise besides an extra Saturday just before Christmas to ensure that retailers were happy with the performance. But a mild December also impacted sales of warm weather merchandise like Bon-Ton Stores (BONT), Kohl's (KSS), Children's Place Retail Stores (PLCE) and Stage Stores (SSI).

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But the undercurrent feeling among the retailers is that at least 8 retailers have reduced their earnings forecast to term the holiday sales a mixed one. One possible reason could be higher discounts offered to lure consumers, who were little bit hesitant to open their purse and waited in the wings to get more for their money. Only four companies have lifted their earnings guidance, leaving the other four to reaffirm its earnings outlook.

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While Limited Brands (LTD), Macy's (M), Ross Stores (ROST) and Zumeiz (ZUMZ) topped analysts expectations of December retail sales, they have also lifted their earnings forecast. But the most disappointing results came from mass merchants such as J.C. Penney (JCP), Kohl's (KSS), Target (TGT) and TJX Companies (TJX). The results from Gaps (GPS) and WTSLA were also disappointing.

As many as eight retailers American Eagle (AEO), Bon-Ton, Cato (CATO), J.C.Penney, Kohl's, Children's Place and Target have cut their earnings forecast following their failure to take advantage of holiday season sales.

Select teen retailers like Buckle (BKE), Zumeiz and luxury item seller Nordstrom (JWN) and Saks (SKS) posted solid results of same store sales for December.

While fifteen retailers reported growth in its comparable store sales, seven companies disclosed fall in their comparable store sales for December.

American Eagle tops the list with 12 percent upside followed by Zumeiz's 10 percent, Ross Stores' 9.0 percent, Buckle's 8.9 percent, Nordstrom's 8.7 percent, TJX Companies' 8.0 percent, Costco's (COST) 7.0 percent and Limited Brand's 7.0 percent to be bracketed in the higher single digit growth. Macy's and Saks witnessed 6.2 percent and 5.8 percent upside respectively in the mid single digit growth segment.

Dillard's (DDS) led the pack of lower single digit growth companies with 4.0 percent rise followed by Target's 1.6 percent, Hot Topic's (HOTT) 1.2 percent, Stage Stores' 1.2 percent and J.C.Penney's 0.3 percent.



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