There are a couple of key takeaways from October chain-store sales: Sure, it was a month that relied heavily on markdowns to drive sales, but shoppers also need to see something fresh and new at the store.
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Victoria's Secret Pink Collection
Take a look atLimited Brands.
The company has trounced same-store sales estimates for several months, helped in large part by the new products coming from its Victoria's Secret division.
Limited is running its business "more effectively" by turning their inventories more quickly to provide shoppers with fresh products, said Richard Jaffe, an analyst at Stifel Nicolaus.
"It excites the consumer," Jaffe said, explaining that often retail success comes down to which retailers do the best job providing customers with "newness, novelty and fashion."
In October, Limited said sales at stores open at least 12 months rose 9 percent, outpacing the 6.1 percent gain analysts were expecting.
The strongest performance came from Victoria's Secret, which swung from a 6 percent sales decline in the year-earlier period to a 14 percent gain.
Limited said that a good chunk of the strength came from Pink, a line that caters to older teens and college-age women to provide a point-of-entry to Victoria's Secret's sexier styles such as Angels.
In October, there was strong demand for items such as Pink's yoga and boyfriend pants.
But Limited shares have already logged strong gains this year, and Jaffe expects the stock has "modest" upside at this level. Jaffe rates it a "hold" and Stifel Nicolaus does do investment banking business with the retailer.
"We anticipate earnings growth next year, and they could exceed it," he said. "...The challenge is to build on this success."
Limited's already trying to pave the way. The company will be running a "secret reward card promotion" during the first three weeks of the month, and it has new products and colors on the way.
But Limited may also have the trends working in its favor. According to AlixPartners, this holiday season, the biggest spenders will be shoppers in their teens and early 20s.
Those are the customers to watch, according to Keith Jelinek, a director in the Global Retail Practice at AlixPartners.
Jelinek explained that these shoppers often aren't burdened down with debt, they are not worried about their retirement accounts, and they probably don't have to worry about falling home values. In short, they are free of many of the worries that are weighing on other age groups, and causing them to curtail their spending.
That's a trend that will help the Limited as well as others who cater to this age group, including Zumiez, Gap, and the Buckle . Not surprisingly, those companies also outpaced analysts' estimates for the month.
And if that doesn't cause enough excitment, there's always the annual Victoria's Secret Fashion show.
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