Weak Nov. Sales Hint At Rough Holidays For U.S. Apparel Stores

(RTTNews) - A number of U.S. apparel retailers on Thursday reported downbeat sales results at established stores in November, despite deep discounts and aggressive promotions on Black Friday weekend.

The National Retail Federation estimates Thanksgiving weekend sales declined 2.7 percent from last year, said to be the first drop in seven years. NRF also estimates that shoppers on average spent 4 percent less than last year.

Looking ahead, the weak sales over the Thanksgiving weekend might force retailers to take bigger markdowns that could hurt their December results.

Retailers normally rake up 40 percent of their annual income in the holiday season, and this holiday season sales was off to a slow start.

L Brands, Inc. (LB), the operator of Victoria's Secret and Bath & Body Works chains, said its November comparable store sales decreased 5 percent, reflecting weakness of its Bath & Body Works and Victoria's Secret Stores. The result missed Street expectations for a 1.1 percent drop. Net sales were $988.5 million, up from $922.0 million last year.

Teen apparel retailer Buckle, Inc. (BKE) announced that comparable store net sales for the month of November edged down 0.6 percent. Meanwhile, net sales grew to 4.6 percent to $101.2 million from last year's $96.7 million.

Meanwhile, value-priced fashion apparel retailer Cato Corp. (CATO) reported that November same-store sales remained flat with last year, while total sales increased 4 percent from last year to $67.3 million.

"November same-store sales were in line with expectations. We continue to expect that the remainder of the holiday shopping season and fourth quarter will be difficult," commented John Cato, chairman, president and CEO of Cato.

Stein Mart, Inc. (SMRT) reported 3.1 percent growth in comparable store sales for the month of November. Total monthly sales also grew 7.7 percent to $119.9 million from the prior-year month.

A report released from the Conference Board on November 26 showed an unexpected further downside in November after reporting a sharp drop in U.S. consumer confidence in the previous month.

The U.S. consumer confidence index dipped to 70.4 in November from an upwardly revised 72.4 in October. The decrease came as a surprise to economists, who had expected the index to climb to 72.9 from the 71.2 originally reported for the previous month.