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December Dud: Same-Store Sales Disappoint — As Expected

NEW YORK — Consumers displayed a penchant for penny-pinching this holiday season, as the nation’s retailers Thursday reported same-store sale...

Echoing results released Wednesday by Hot Topic, Pacific Sunwear of California Inc. said its comps increased 16.1 percent, with PacSun up 15 percent and Demo up 25.8 percent. PacSun now projects fourth-quarter comps will be up 13 percent, assuming comps will be up 6 to 8 percent this month, and accordingly boosted earnings per share guidance to 43 cents versus the 37 cents analysts were expecting.

The rest of the specialty sector was mixed. Chico’s FAS turned in a 12.6 percent increase, but Ann Taylor and Talbots reported declines of 14.6 and 9.6 percent, respectively, and the latter reduced fourth-quarter earnings guidance to 42 to 47 cents from 48 to 53 cents.

Among the teen stores, Abercrombie & Fitch comps were flat, but it raised EPS guidance to a range of between 86 and 88 cents from 79 cents due to December’s better-than-expected sales and margins. Wet Seal was down 19.4 percent and warned on the current quarter, while Gadzooks, which announced its withdrawal from men’s wear retailing, was down 2.4 percent.



DEPARTMENT STORES

Federated Department Stores’ same-store sales dropped 2.6 percent for the month. The parent of Macy’s and Bloomingdale’s, among others, said fourth-quarter profits would come in at the low end of its plan for $1.95 to $2.05 a share, excluding the impact of potential yearend store closings.

May Department Store Co., parent of Lord & Taylor and Hecht’s, among others, reported a 4.7 percent comp decrease for the month.

Kohl’s Corp., the usually robust discount-department store hybrid, said same-store sales rose 3.3 percent. "With a compressed selling season, we had expected much stronger comparable-store sales in December," admitted chief executive Larry Montgomery, in a statement. "Going into the new year, we will continue to be aggressive in our marketing and we are well positioned to continue to increase market share."

Kohl’s now is looking for its fourth-quarter profits to be at the lower end of its previous guidance and Wall Street expectations of 79 to 84 cents a share.

Sears, Roebuck & Co.’s December comps slid 4.6 percent in its domestic doors. Also on Thursday, Fitch Ratings lowered its senior unsecured debt ratings for Sears and some of its related businesses to "BBB-plus" from "A-minus," and removed the firm from rating watch negative. At the same time, Fitch has affirmed Sears Roebuck Acceptance Corp.’s commercial paper rating at "F2" with a negative outlook.
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