Shaky Retailers Head Into Holidays
For years now, retailers decking their halls for the crucial holiday season have been waiting for shoppers to shed the tentative attitude about spending that became entrenched in the recession.
Recent data shows that consumer spending and consumer confidence are on the rise, and forecasters have released relatively upbeat predictions for how sales will grow during the November and December shopping crush.
And yet the most recent snapshot of how the retail industry is faring — delivered in the form of a flurry of quarterly earnings reports in the past two weeks — suggests that customers are still cautious.
Retailers ranging from Urban Outfitters to Dillard’s saw their stock sink last week after they rang up disappointing sales during the quarter that included the back-to-school shopping season. Dick’s Sporting Goods said last week that it is canceling some orders and working with vendors to return products that have not been selling well after a rough fall quarter left it with bloated inventory.
The chain blamed unseasonably warm weather, saying sales were especially weak in outerwear, fleece and items such as compression clothing that football or soccer players might layer under their uniforms in colder temperatures. Macy’s, too, partially attributed its 5.2 percent plunge in sales to temperatures that did not exactly make shoppers eager to spring for new coats and boots. Nordstrom, however, did not try to pin its disappointing quarterly performance on weather — executives said its coat business was actually relatively strong. Instead, the chain summed up its lousy sales this way: “We’ve got less people buying clothes this quarter than we expected, and there’s really nothing else to point to,” James Nordstrom, the company’s president, said on a conference call with investors.
Still, many forecasters expect that consumers will deliver sales growth to the industry of somewhere between 3 and 4 percent. A survey conducted by consultancy Deloitte found that 75 percent of shoppers plan to spend more this holiday season than they did last year, the largest share to give that response since 2000.
Some retailers’ results offered evidence that customers are indeed willing to open their wallets.
L Brands, the company that owns Victoria’s Secret and Bath & Body Works, said Wednesday that it was raising its outlook for full-year earnings after its revenue jumped 7 percent in the most recent quarter. The company registered record back-to-school spending at Pink, the Victoria’s Secret offshoot aimed at a younger shopper, and growth at Bath & Body Works on everything from home fragrance to hand sanitizer.
