Retailers are expected to report modest November same-store sales gains Thursday due in part to relatively bland post-Thanksgiving sales. Also lowering expectations is a calendar shift that left most of the month in a transitional period when it was too early to benefit from holiday shopping.
The Bank of Tokyo-Mitsubishi expects November same-store sales to increase 5% overall. This compares with October's industrywide 3.2% increase and September's 5.9% rise.
, said SunTrust analyst Patrick McKeever, has a good chance of beating its 3% to 5% forecast, with its Target stores division likely beating his 4% to 6% guidance. The company had negative 6.7% comps in November 2002.
But Target's main rival
is expected to report at the low end of a 3% to 5% range, McKeeve predicted. This compares with a 2.6% rise last November and October's 4.5% increase.
"While sales tracked in line with plan through the first three weeks of he month, weak Black Friday sales could have moved the needle down," said McKeever.
"Wal-Mart continues to see a stretched consumer, a trend which could continue until the employment picture improves," wrote Morgan Stanley analyst Bruce Missett in a recent research note. Missett expects a 4% rise in comps for the company.
In the discount "dollar" store space, which includes
, McKeever noted that there have been slower sales, which "could elevate concerns about the low-income consumer."
At Dollar General, McKeever sees comps up 2% to 4%, compared with last year's 0.5% increase. He expects strong sales of low-margin consumables and noted that the company's sales should improve in December as customers buy "close to need," or closer to the holidays. Dollar General reports third-quarter earnings Thursday morning as well; analysts are calling for 20 cents a share, from 16 cents a share a year ago.
In the department store sector, Morgan Stanley's Missett sees overall same-store sales as flat to slightly positive. He sees high-end stores
as among the few posting growth. Nordstrom's same-store sales are seen up 2% to 4%, Neiman-Marcus' up 1% to 3% and Saks with a 2% to 4% increase. Additionally, he expects
, whose comps have struggled in negative territory previously, to have a 1% to 3% rise.
Thomas Weisel analyst Anne-Marie Peterson believes the retailers in the specialty arena that have posted the most solid results so far this year will continue to do so in November. In October, the specialty retailers' same-store sales declined 1.2% overall, according to the Bank of Tokyo-Mitsubishi, which had followed a strong 7.9% rise in September.
Two of the stores with the most impressive results this year include
. The analyst sees a 5% to 7% increase at Hot Topic, compared with the 5.3% consensus and the positive 4.7% comps the company reported last year. Chico's reported Tuesday after the close that November same-store sales rose 16.3% compared with the 11.8% consensus and Peterson's own forecast for a 14% to 16% rise.
Another theme Peterson sees is the weakness in the teen apparel retailers, especially
Abercrombie & Fitch
. They are "struggling due to a worsening supply/demand imbalance, lack of differentiation and concept positioning challenges," she said.
At Abercrombie, Peterson sees same-store sales falling 5% to 7% vs. last year's 13% decline and the consensus of a 4.3% drop. She noted that while the company strives to limit promotions, she believes that "it is inevitable that Abercrombie will need to become more promotional, which will pressure margins."
Peterson sees American Eagle same-store sales down 4% to 6% compared with a 6.3% decline last year and the negative 5.4% consensus. In contrast to Abercrombie, American Eagle has been very promotional, she said.