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Updated from 1:13 p.m. EST

Shares of many retail chains rose Thursday after releasing December sales reports which, while reflecting a recession, showed American consumers weren't as reluctant to spend this holiday season as some had feared.

An exception was


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, which lost a quarter of its value after it posted a worse-than-expected loss and set a $35 million charge.


S&P Retail Index

ended up about 0.8% following better-than-expected reports from retailers including


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The widely watched Bank of Tokyo-Mitsubishi retail index showed holiday sales rose 2.2% in 2001, its worst performance since 1995 but also better than some analysts had forecast.

"The expectations had been pretty suppressed so many of them were able to beat the estimates," noted Mark Mandel, analyst at SunTrust Robinson Humphrey.

Discounters were doing particularly well, with

BJ's Wholesale




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all seeing gains.

Shares of BJ's Wholesale closed up 2.8% to $44.36 after saying comparable store sales rose 5.8% in December. The company also said an "unfavorable merchandise mix and competitive aggressive pricing" hurt its margins, leading it to lower its fourth-quarter earnings guidance to 76 cents to 78 cents a share, down from 80 cents.

Meanwhile, Wal-Mart, the nation's biggest retailer, posted an 8% rise in December same-store sales, 2 percentage points better than its most recent forecast, and said it expects to match fourth-quarter earnings estimates of 48 cents a share. In commentary that reflected industry trends, the company said traffic was strong but customers were buying cheaper items, leading it warn of potential margin pressure in 2002. Its shares were up 60 cents, or 1%, to $56.80.

Still, Mark Miller, an analyst at William Blair, raised his 2002 earnings estimates on Wal-Mart by a penny and increased estimates on Target by 2 cents Thursday.

"Although promotional activity was higher than last year, the sell through rate was ahead of expectations, so the margin outlook remains favorable," he said. "Many discount retailers bought conservatively and they've been able to sell a higher portion of their inventory at full price."

Miller believes the outlook remains favorable for the group as consumers continue to seek out value. He also noted that cost pressures and the promotional environment are both easing.

"The fact that sales were better than expected despite heavy promotions shows that inventories were in control," added David Campbell, an analyst at Davenport & Co. "I'm looking for retail sales to rise throughout 2002."

Still, analysts remain concerned about the outlook for certain segments of the industry.

"Specialty retailers are making sure their inventory levels are extremely conservative for January," said Kindra Devaney, analyst at Fulcrum Global Partners. "It will be interesting to see how the customer responds to full price merchandise after all the promotions and discounts."

Devaney noted that the consumer is likely to remain very price sensitive and that discounters will continue to take market share away from departments stores and the specialty retail group. She is looking for earnings in the specialty arena to be flat in the first quarter.

Thursday's reports sent shares of several companies that had been struggling in different directions.

Gap Stores

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rose 12.6% to $16.35 after reporting an 11% decline in same-store sales and saying its fourth-quarter loss wouldn't exceed 6 cents a share. The results, which continued a string of 20 straight declines in monthly same-store sales for the clothing retailer, were better than expected.



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plunged 26% to $3.01 after the drug-store chain reported an operating loss of 22 cents a share for the third quarter ended Dec. 1. The result, which the company blamed on the recession and competitive pressures in the sector, was much wider than analysts' 14-cent estimate.




tumbled 12.5% to $4.20 after the company said fiscal-year earnings would trail estimates and disclosed its in talks with its lenders over existing debt. Word of the talks exacerbated concerns that were raised by a Wall Street analyst last week who said a bankruptcy filing wasn't out of the question for the discount giant. Kmart also said December same-store sales fell 1%.

Among other companies reporting results:

Abercrombie & Fitch

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said same-store sales tumbled 10% in December, while total sales at the clothes retailer rose 3% to $249.6 million. Its shares lost 65 cents, or 2.3%, to $27.09.



posted a 2.4% decline in December same-store sales and said it will take a $17 million charge to cut costs. The company still expects to match fourth-quarter profit estimates of 25 cents to 30 cents a share, excluding the charge. Its shares gained 87 cents, or 2.5%, to $35.88.

Claire's Stores


said December same-store sales were flat. The seller of jewelry and accessories for teens raised its fourth-quarter guidance, saying it now expects earnings of more than 50 cents a share. Analysts expect income of 42 cents. The shares rose $1.88, or 12%, to $17.30.

Federated Department Stores


, the owner of Macy's, Bloomingdale's and other chains, reported a decrease of 8.6% in same-store sales for December. Total sales for the month fell 8.7% to around $3 billion. For the combined nine weeks of November and December, Federated's same-store sales fell 5.4%. The company expects fourth-quarter earnings of $1.85 to $2 a share, compared with analysts' consensus estimate of $1.90. Federated was up 74 cents, or 1.8%, to $42.



said December same-store sales fell 2.7%, although the company said it was a "considerable improvement" from autumn and predicted it would meet the consensus earnings forecast of 41 cents a share. Its shares fell 62 cents, or 4%, to $14.75.

J.C. Penney

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said same-store sales rose 5.4% from a year ago on a double-digit rise in its home category. It said comparable-store sales in its drugstore unit were less than expected. The company backed its previous full-year earnings guidance of 30 cents to 35 cents. The shares lost 53 cents, or 2%, to $26.

Limited said same-store sales fell 1% in December, but analysts were expecting a sharper decline. The company now expects to beat Wall Street's consensus earnings estimate of 51 cents a share for the fourth quarter but remained cautious about January and the spring selling season.

Intimate Brands


, which is 84%-owned by Limited, said same-store sales were flat last month, which also exceeded estimates. The company, like its parent, also expects to top fourth-quarter forecasts. Limited rose 38 cents, or 2.4%, to $16.38, while Intimate Brands added 71 cents, or 4.5%, to $16.46.

Ross Stores

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said December same-store sales rose 9%, and the company projected earnings of 61 cents a share for the fourth quarter. Analysts are calling for income of 52 cents, according to First Call. Ross's shares fell 89 cents, or 2.6%, to $33.69.

Sears said December same-store fell 2.4%, a stronger showing than analysts expected. The company projected earnings, excluding items, of $2.02 a share for the fourth quarter. For the full year, earnings will be about $4.22. Analysts are looking for income of $1.91 for the fourth quarter and $4.11 for the year. The shares added $2.28, or 4.6%, to $51.73.



said total December sales fell 17%. The catalog retailer also lowered its fourth-quarter earnings estimate, saying it will be "materially below" current analysts' forecasts. Its shares dropped 43 cents, or 9.8%, to $4.

Target same-store sales for December rose 0.6%, while total sales increased 7.5%. Analysts were expecting the retailer's comp sales to fall 2.7% in the month. The company now expects to top the First Call earnings estimate of 65 cents a share for the fourth quarter. The shares added 47 cents, or 1.2%, to $40.86.


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said same-store sales rose 10% and raised its fourth-quarter earnings guidance to 58 cents a share, up from analysts' consensus 53-cent estimate. The shares closed up 71 cents, or 1.8%, to $40.61.

Williams-Sonoma said same-store sales for the holiday shopping season increased 5.5%. Total revenue for the nine weeks ended Dec. 30 increased 12.2% to $588.8 million. Based on the results, the company, which owns Williams-Sonoma, Pottery Barn and other stores, increased its full-year earnings estimate to a range of $1.25 to $1.28 a share from $1.17 to $1.24. Analysts expect income of $1.19 per share. Williams-Sonoma's shares gained 92 cents, or 2.2%, to $42.38.