Holiday spending beats expectations

LOS ANGELES – Christmas finally came for the nation’s retailers last month in the form of modest sales increases and a rush of last-minute shoppers.

Retailers posted a 2.9 percent sales increase compared with the like month a year earlier, easily beating expectations for a 2 percent gain, according to Thomson Reuters’ tally of 30 major chain stores released Thursday.

But those figures were helped by a miserable December 2008 that was easy to beat, analysts said, and didn’t signal the return of free-spending consumers.

Industry watchers are still guarded about what’s to come for retailers now that the holidays are over. With little incentive to hit the malls and spend, and with economic problems continuing to constrain consumer spending, there are concerns that merchants could hit a lull in January.

Excluding drugstores, all retail sectors beat expectations last month. Discounters posted a 5.3 percent increase; apparel sellers saw sales rise 4.7 percent; and even the beleaguered department store channel reported a 0.7 percent gain.

All told, three-fourths of retailers did better than expected, with healthy performances coming from both low-priced and luxury sellers.

“Retailers handily exceeded very modest expectations,” said Ken Perkins, president of research firm Retail Metrics Inc. “A last-minute sales surge saved the day prior to and immediately following Christmas.”

Strongest performers included off-price sellers TJX Co., parent to the TJ Maxx and Marshalls chains, which posted a 14 percent increase and Ross Stores Inc., up 12 percent.

But even luxury seller Saks Inc. had a strong month, reporting a 9.9 percent gain that beat expectations for a 2.8 percent rise.

At San Francisco-based Gap Inc., parent to the Gap, Banana Republic and Old Navy chains, sales rose 2 percent.

Although analysts had expected even higher results, Chief Financial Officer Sabrina Simmons said the chain was “pleased that our planned promotions and holiday assortments allowed us to compete effectively.”

The laggard was the long-suffering teen and children’s apparel sector, which saw sales decline 2.5 percent over December 2008, though that was better than the 4.3 percent drop analysts surveyed by Thomson Reuters had expected.

Teen retailer Abercrombie & Fitch Co., which was been plagued by huge sales declines for months, reported that sales plummeted 19 percent, worse than the predicted 12.5 percent decline. City of Industry-based Hot Topic Inc. saw sales fall 10.9 percent and Foothill Ranch-based Wet Seal Inc. posted a 4.6 percent drop.

Discount giant Wal-Mart Stores Inc. no longer reports monthly sales.

Results are based on sales at stores open at least a year, known as same-store sales and considered an important measure of a retailer’s health.