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The strong sales, coupled with leaner inventories at most retailers, temporarily faded prior concerns that eroded gross margins would weaken profits in the fourth quarter. Still, November same-store sales warranted scrutiny as a calendar shift may have artificially inflated results. Some retailers urged Wall Street to look at the November-December period before making any conclusions.
Eric Beder, a teen and specialty retail equity analyst at Brean Murray Carret & Co., said in a research note that he believes "the fruits of retail management's drive to reduce inventories will begin to bear fruit in December. We believe discounting in our universe is in-line with last year's levels, which should allow for margin integrity."
Total sales for the month quantified top-line strength across all three major channels. Of the retailers tracked by WWD, the specialty stores posted a total sales gain of 15.8 percent for November, while sales in department stores swelled 12 percent and mass retailers gained 8.4 percent.
MasterCard said in its SpendingPulse report that retail "sales in November improved in a number of sectors as the holiday season took off on a positive note." But the gains were mostly outside the apparel category, although a recent cold snap has jolted apparel sales.
"Much of the boost in November's sales was due to increases in electronics sales, which, benefiting from hot product promotions, grew at a 12 percent rate," MasterCard said in its report. "Men's apparel sales grew 7 percent, just slightly more than total apparel sales (6.9 percent), helped by holiday shoppers responding to the cooler seasonal weather across the Northern regions. Lagging sectors for November overall included women's apparel (down 3.9 percent), furniture (a 3.5 percent drop) and furniture/furnishings (down 1.4 percent)."
For November same-store sales, department stores were the big winners in the month, posting an average comp-sales increase of 8 percent. The segment was buoyed by double-digit results at Saks Inc., Macy's Inc. and Kohl's Corp., which reported gains of 25.7, 13.4 and 10.2 percent, respectively.