Costco Wholesale, the largest U.S. warehouse club operator, reported a smaller-than-expected 2 percent rise in January same-store sales, saying sales were hurt as the five-week period included one day less due to the New Year holiday.
But redemption of gift cards helped spur industry-wide sales that topped analysts' expectations across a broad spectrum of retailers, including department stores and apparel makers.
Gap Posts Flat Sales
Even struggling retailer Gap managed to post flat sales at stores open at least a year in the four weeks ended Jan. 27, the first time in a year sales did not decline at the clothing retailer, whose chief executive left the company in January.
Federated Department Stores, parent of Macy's and Bloomingdale's, said gift cards, as well as cold weather, helped spur an 8.6% increase in same-store sales in January, which far outpaced is own forecast of a 1.5% to 3% increase. Federated also raised its fourth-quarter profit forecast.
Arctic weather hit much of the U.S. in January, with parts of the country seeing record or near-record cold, according to weather-tracking firm Planalytics.
That helped spur sales of winter clothing that had languished on store shelves during what Planalytics said was the warmest December in at least 10 years.
January, a month historically driven by clearance sales, has taken on greater importance in the past few years as gift cards rise in popularity. Deutsche Bank analyst William Dreher estimated in a research note that roughly 40 percent of gift card recipients redeemed those cards in January.
According to the National Retail Federation, $27.8 billion was spent on gift cards in November and December, up from its original estimate of $24.8 billion.
Other Retailers Beat Forecasts
Other retailers that beat expectations included Limited Brands, where apparel sales and sales at its Bath & Body Works business helped offset markdowns that hurt its Victoria's Secret brand. Limited posted an 11% increase in same-store sales, beating the average analyst forecast of 8.1% compiled in a Reuters survey.