Analysts warned of a tough task ahead, as mall-based department and specialty stores battle Wal-Mart Stores Inc. over bargain-hungry consumers willing to wait for last-minute markdowns.
Wal-Mart said December sales were unlikely to keep pace with strong November results.
Analysts and retailers said the holiday season was not yet lost, recalling last year when a big jump in demand just before Christmas boosted sales.
Overall, research firm Retail Metrics said retailers posted a 3.7% gain in November sales at stores open at least a year -- a key retail measure known as same-store sales. That was below expectations for 3.9% growth, and marked the first time since July that sales missed forecasts.
Wal-Mart was the early-season winner, with November same-store sales up 4.3%, as it offered deep discounts, including a laptop computer for less than $400.
The world's biggest retailer said December sales growth would likely be more modest, in the range of two to four percent, in part because demand for gift cards -- which don't count as revenue until they are redeemed -- will push more business into January.
Department stores were among the laggards, with Nordstrom Inc., Kohl's Corp. and Federated Department Stores Inc. all reporting weaker-than-expected sales, while a handful of apparel chains, including Aeropostale Inc., that offered big discounts beat expectations.
"Retailers that were aggressive in discounting captured the Thanksgiving traffic," said Eric Beder, retail analyst with Brean Murray Carret & Co. "If you weren't as aggressive, you paid the price on the top line, but you may make it up down the road (in higher profit)."
Federated and Kohl's said despite poor November results, Thanksgiving weekend sales were strong, and they hoped to continue that trend in December, which is typically the biggest month of the year for retailers.
Last-minute rush
Consumers saw energy prices come down from steep summer levels, and analysts said customers were in a buying mood, for now, but clearly seeking markdowns.
"We expect consumers to continue to push back their shopping in hopes of a more promotional environment," Merrill Lynch analyst Mark Friedman wrote in a note to clients.
Wal-Mart set the stage for a fiercely competitive holiday shopping season by launching its earliest-ever advertising campaign on November 1 and slashing prices on key electronics and toys on the Friday after Thanksgiving, known as "Black Friday."
Early data suggests that Wal-Mart's November success came at the expense of rivals, especially mall-based specialty and department stores that opened later and offered fewer eye-popping deals.
Target Corp., the No. 2 discounter, posted only a 2.6% same-store sales increase, marking the first time in 18 months that its sales growth trailed Wal-Mart's.
J.C. Penney Co. Inc. beat expectations with a 3.6% gain, but said it was still early in the holiday season. It maintained its fourth-quarter forecast, which is below Wall Street's more optimistic view.
Costco, the largest warehouse club operator, reported a six percent same-store sales gain, missing Wall Street estimates, although that was partly because a strengthening US dollar deflated international results.
Teen clothing retailer American Eagle Outfitters Inc. reported sales growth well below Wall Street expectations, and slashed its fourth-quarter profit forecast.
Analysts said rival Aeropostale Inc. may have siphoned off customers by offering half-off merchandise throughout the store. Its same-store sales jumped 7.3%, well above expectations. (Reuters)
