Black Friday Couldn't Save These 4 Retailers

NEW YORK ( TheStreet) -- Black Friday provided a much-needed boost to most retailers in November. But for some, the Thanksgiving weekend shopping frenzy wasn't enough to drive momentum.

Out of the 21 retailers tracked by TheStreet, nine beat estimates while seven missed Wall Street's target and two were in-line.

For those who fell short of analysts' expectations, it looks like it will be a long, choppy holiday season.

Here's a look at the retailers that disappointed Wall Street in November.


Gap ( GPS) reported its fifth consecutive monthly decline in same-store sales in November.

During the month, the specialty retailer posted a 5% drop, wider than the 4.3% decrease analysts forecast and a reversal from last year's 5% increase during the same month.

This comes even after Gap tried to stay competitive during the Black Friday weekend, keeping many stores open on Thanksgiving Day and offering deep discounts at all three of its chains.

By division, namesake stores fell 2%, Old Navy was down 7% and Banana Republic's comparable sales were flat.

"This is just the start of the holiday selling season and we expect December to remain fiercely competitive and highly promotional," said CEO Glenn Murphy. "Our brands stand ready to compete at every opportunity to win customers over -- in stores and online."

"Aggressive promotions across all divisions likely drove traffic during Black Friday; however, November was the toughest comp for the company as sales were strong last year," Stifel Nicolaus analyst Richard Jaffe wrote in a note. "The highly aggressive promotional activity underscores management's efforts to drive traffic and accelerate sales. During fourth quarter, we anticipate continued aggressive promotions and coupled with increased product costs significant margin pressure. This margin erosion will be offset somewhat by our estimation by the company's effective management of expenses and inventory."

Gap shares rose 9 cents to $18.78 on Thursday.


Target's ( TGT) midnight Black Friday opening couldn't save it from reporting another month of lackluster sales.

The discounter posted a 1.8% uptick in comparable sales, missing Wall Street's estimates of a 2.8% increase. The miss is predominantly due to weakness in apparel and home goods, with accessories, jewelry and women's apparel among the softest categories. Apparel, in particular, was hurt by unseasonably warm weather in November.

Target's grocery segment remains the bright spot, with Janney Capital Markets analyst David Strasser estimating food contributed about 2.5% to total same-store sales. "Essentially all comp was grocery," he wrote in a note.

Strength in consumer electronics was more than offset by weakness in toys, movies, music and books.

"The softness in toys is in part attributable to the layaway program at Wal-Mart ( WMT), which is running ahead of expectations," Strasser wrote.

Wal-Mart has been aggressively investing in price in its mission to reclaim its shoppers during the all-important holiday season. The No. 1 retailer pulled out all the stops, opening at 10 p.m. Thanksgiving evening, reviving its layaway program and introducing its price-match guarantee. If Target's results are any indication, Wal-Mart's goal of domination may be working.

"Notably, this comp was in spite of opening stores at midnight on Black Friday this year and a rebound in the TV business for the industry," J.P. Morgan analyst Christopher Horvers wrote in a note. "With P-Fresh and RedCard contributions now peaking, these results highlight the challenges facing Target given ongoing modest trends in the core."

Looking ahead, Target guided December same-store sales in the low-to-mid single digits, as expected.

Target shares rose 19 cents to $52.89.

J.C. Penney

J.C. Penney ( JCP) is blaming its bigger-than-expected same-store sales decline on its decision not to take part in the Black Friday midnight madness.

Instead, the department store opened its doors for holiday shoppers at 4 a.m., as it had in prior years, which the company said "adversely impacted Black Friday."

But J.C. Penney didn't just miss out on early holiday sales, as the company noted that "sales remained soft in-store throughout the holiday weekend." Management also said that the company had been trending better than last year until last weekend.

For the month, comparable sales fell 2% compared with the 1.6% decrease analysts predicted. Online sales tanked 6.9% for the month, but did not include sales from Black Friday through Cyber Monday. Those numbers will be included in December results.

J.C. Penney is betting on its new CEO Ron Johnson, the man credited with the success of Apple's ( AAPL) retail stores. Since taking the post on Nov. 1, Johnson has started to revamp the management team, hiring two former Apple colleagues to fill the chief talent officer and chief operating officer roles.

The department store is attempting to revitalize its stale image, including brands like MNG by Mango and Sephora, and by purchasing the Liz Claiborne brand.

But it appears it is too late for Johnson to make any monumental changes for the holiday season.

The stock rose 0.6% to $32.63 in Thursday.


Kohl's ( KSS) was one of the biggest surprises of the month, reporting a 6.2% plunge in same-store sales compared with consensus estimates of a 2% increase.

This came despite compelling promotions, its midnight Black Friday opening and the highly successful launch of the new Jennifer Lopez and Marc Anthony lines.

"November sales were disappointing. We were encouraged by our improved performance in both stores and e-commerce over the Thanksgiving weekend," said CEO Kevin Mansell. "A majority of our planned incremental marketing investment is in December and we expect to be able to benefit as customers look for value as they complete their holiday shopping."

"While unseasonably warm weather likely had a negative impact on sales, we believe that the moderate income consumers, Kohl's target, is feeling particularly constrained and management is challenged to motivate her to shop and spend," Jaffe wrote in a note.

It also appears that sales are being funneled to rival Macy's ( M), which reported a 4.8% jump in same-store sales, better than the 3.6% increase Wall Street expected.

Macy's also opened at midnight, but saw more success.

"A strong Black Friday punctuated our very positive sales performance throughout November at both Macy's and Bloomingdale's. This was the first year that Macy's stores opened at 12 midnight on Black Friday, which particularly attracted millennial customers who gravitate to the fashion, newness and value in our merchandise assortments," said CEO Terry J. Lundgren.

Shares of Kohl's fell 3.6% to $50.20 in morning trading Thursday.

- Reported by Jeanine Poggi in New York.

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