Spokane7
65°
December 1, 2011 in Business
Nordstrom, Costco beat retail estimates
NEW YORK — Oh what a difference a weekend can make.
Shoppers taking advantage of big discounts and earlier store hours during the start of the holiday shopping season last weekend helped boost retailers’ revenue for the entire month of November.
Retailers from Macy’s to Costco today reported monthly revenue at stores open at least a year — an indicator of a merchant’s health — that beat Wall Street estimates. The overall tally for the 21 retailers that reported revenue for November rose 3.2 percent, according to the International Council of Shopping Centers.
November results offer an important benchmark for retailers and economists. During the holiday shopping season, merchants can make up to 40 percent of their revenue. The period that runs from November through December also gives valuable insights into what it takes to get Americans to spend in the weak economy.
“Clearly, consumers are focused on those bargains,” said ICSC chief economist Mike Niemira. “It’s a bit tougher to get shoppers to buy from a year ago.”
November’s results were boosted by the four-day weekend start on Thanksgiving Day, the traditional kickoff the shopping season. Americans spent $52.4 billion over the weekend, the highest total ever recorded during that time, according to the National Retail Federation.
While the figures released today point to a solid start to the shopping season, they represent only a small slice of the industry. Dollar stores, home-improvement chains like Best Buy, consumer electronics stores like Home Depot and even Wal-Mart, the world’s largest retailer, don’t report monthly revenue.
Still, retailers can glean a lot from the numbers.
For instance, well-heeled shoppers continue to be resilient in the weak economy.
Luxury chain Saks Inc., which operates Saks Fifth Avenue, fared well, reporting a 9.3 percent increase. That’s better than the 6.1 percent increase analysts had expected.
Macy’s, which operates the Macy’s and upscale Bloomingdale’s department store chains, also posted a 4.8 percent gain, above the 3.9 percent increase that Wall Street analysts had expected. The company’s Macy’s chain, which was among the retailers who opened at midnight on Thanksgiving evening, benefited from the earlier opening.
“A strong Black Friday punctuated our very positive sales performance throughout November,” said Terry J. Lundgren, Macy’s chairman, president and chief executive in a statement.
But not every retailer had a strong showing in November. Those targeting lower and middle-income shoppers an uphill battled to get shoppers to spend.
“The lower-income shoppers are postponing their purchases or were cherry picking the deals,” said Walter Loeb, a New York-based independent retail consultant.
Target posted a 1.8 percent increase, below the 2.8 percent gain that Wall Street analysts had expected. The discounter blamed the decline on lackluster toy sales.
Additionally, the company told analysts in November that it was also hurt by rival Wal-Mart’s holiday layaway program that allows customers to pay-as-they go for gifts, hurt toy sales. Wal-Mart also has been heavily pushing low prices in its ad campaign, which likely hurt Target.
J.C. Penney, which targets middle-income shoppers, also reported disappointing results. The retailer said its decision not to open at midnight on Thanksgiving evening hurt revenue on the day after the holiday, which set the tone for the remainder of the weekend.
J.C. Penney reported a 2.0 percent sales drop, worse than the 1.8 percent decline that analysts had expected.
“Sales remained soft in-store throughout the holiday weekend,” the company said in statement.
© Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Seven firms or nonprofits win Agora Awards 
Shadedmuse on December 01 at 12:05 p.m.
Ression is over. and cosco seeing an increase in proffits is because they can now sell booze. get ready for cosco to sell make your own distillerys.
zelda on December 01 at 12:33 p.m.
They’re doing tons of discounting to get the revenue so the profit picture may not be rosy. We’ll see…
reservedparking on December 01 at 1:01 p.m.
Muse: Cos(t)co can’t sell booze ‘til July. Next year.
Jethro_toll on December 01 at 8:28 p.m.
reservedparking..and others. Costco sells booze in nearly every state except Washington. Just read your Costco Connections magazine. A bottle of Kahlua goes for $12.95, nearoy 1/2 of WA. A bottle of Crown Royal is $22.95 again half of Washington. At the Reno airport its two blocks to Costco to grab a bottle of booze and get back to your flight.
Therefore Washington’s Costco stores of which there are 29 stores of about 425 in the U.S as the last count (and about 125 in the rest of the world) is a 5% negligible factor in their economic performance.
Costco owns no distilleries nor wineries. It is all contracted out in order to avoid depreciation, taxes, utilities, insurance, payroll among other factors. Its a smart business model. A winery sits dormant at least 9 months a year. Why pay for it to sit there when you can contract out the expertise with high quality California grapes that are glutting their market? Note that Costco rarely uses Washington grapes (15% of the California markets) because the grape industry here has carefully groomed their production to meet demand.
EVERYTHING is contracted out from shipping, to labeling, corking, transportation and storage. Costco also enterprises on the “if you dont buy it now, it will be gone”. There Cabernet of $12.95 (2124949) was only produced in 40,000 bottles and not marketed at every Costco. Note the CDA Cellars wines are only sold in the CDA Costco of which a few are sold no where else.
Note: Costco is the WORLDS biggest wine seller.
As far as Costco’s BF participation, they produced a three day circular of which the prices could be beat if you shopped around and they did not change their hours to chase the dog.
Costco’s stock has been floating between $81 and $87 for the last three months *from $$76.54 a year ago) due to its profitability as people make their normal weekly trip but increase their purchase during the holidays. Therefore is not that many more “visits” i.e. an overhead cost, but people are buying more per visit.
I consider Costco stock a BUY as they plan to expand into Russia and China and the far east. James Sinegal was touring with Chinese reps last year in the Spokane/CDA area.
A simple indicator is go try and get a parking space at Costco.