In the luxury department store space,
(SKS) has put near-term pressure on sales for the group because of the impact Hurricane Sandy had on their east coast presence. The company posted a 0.7% same store sale increase in the fourth quarter of 2012, slightly better than the flat guidance, but below the 6.3% same store sales increase
(JWN) reported and the 5.3% increase at Neiman Marcus.
Based on the commentary from MasterCard Advisors, it's possible that the impact of winter storm Nemo, which dumped large amounts of snow in New England (a big market for Saks), could have impacted sales at Saks in February, dragging down sales for the luxury department store group.
Management has been cautious on sales, stating that 2013 will be a volatile year given higher taxes and fiscal uncertainty. Saks is also in the midst of a transition year as they expand IT initiatives and improve the e-commerce business. That will put pressure on margins as well as the stock near-term (it's trading at a premium to the department store group).
were two retailers that pleasantly surprised investors with their better-than-expected February same store sales last week. Gap's Old Navy division was surprising resilient despite the impact the payroll tax had on lower-end consumers. The company is delivering trend right merchandise and is managing inventories well, and the stock has been on an uptrend since reporting earnings at the end of February.
TJX, the operator of TJMaxx, Marshalls and Home Goods stores, benefitted from the improved weather conditions at the end of the month and exhibited strength in the home business during the month.
It's become a tough environment for retailers to manage their business given not only the payroll and gasoline concerns, but also the political uncertainty surrounding the sequester. Sarah Quinlan, Senior Vice President at MasterCard Advisors, says retailers are "seeing changes in sales day to day, week to week, and month to month. As such they have to manage their business on those time frames."
That being said, today's broad industry report shows that not all retailers are being negatively impacted by the external pressures. Retailers that have the right strategy and the right merchandise are winning in this environment. Not all retailers are created alike.
Written by Lindsey Bell in
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