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Retailers Post Gains in October, See Sandy Hit Ahead

Reuters
Thursday, 1 Nov 2012 | 12:12 PM ET

A handful of U.S. retailers expect the massive storm that hit the U.S. East Coast this week to hurt sales in November, while overall holiday sales should still show the slow growth that was forecast before Sandy hit.

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Costco Wholesale, Nordstrom, and Rite Aid all said on Thursday that November sales would suffer because of store closures due to Sandy, one of the largest storms to ever hit the United States.

Costco , however, said the effects would be minimal.

"November is where we will see the impact, but I think it'll be marginal," said Tom Clarke, director of AlixPartners' retail practice. AlixPartners still expects sales for the holiday season sales to be up 3.5 percent to 4 percent.

Rahul Sharma of retail consultant Neev Capital agreed.

"November is so huge, the last few weeks of the month can be very big and so if you are up and running by then, you should be OK," he said.

Sandy hit during the November sale period for most retailers, so few said the storm had affected October sales. (Read More: See CNBC's Complete Coverage of Superstorm Sandy)

"While home centers, mass merchants and grocery stores experienced a boost in traffic and 'must-have' purchases at the end of retail October, the overall impact of this superstorm will be realized in retail November," said Planalytics, a Philadelphia consulting firm that advises businesses on weather-related matters.

Overall, sales at stores open at least a year, excluding at drugstores, rose 4.7 percent, compared with analysts' expectations for a 4.3 percent increase at the 17 chains tracked by Thomson Reuters I/B/E/S.

The monthly tallies provide just a glimpse into overall sales at major U.S. chains. Many retailers, including Home Depot, Lowe's and Wal-Mart Stores, could have had a boost in sales ahead of the storm, but do not report monthly results. Neither do grocery chains, where shoppers stocked up on water and nonperishable food in the days leading up to the storm.

With the holiday season fast approaching, retailers have been scrambling to get back to business and get customers into stores.

Among the October results reported on Thursday, Limited Brands comparable sales were up 3 percent, while Wall Street was expecting a rise of 5 percent, according to Thomson Reuters data.

This was a rare miss for the parent of the Victoria's Secret lingerie chain, but Limited raised its profit forecast for the quarter. The company, which reports quarterly results on November 14, said it expected earnings of 23 cents to 25 cents a share, excluding items, up from an earlier outlook of 15 cents to 20 cents.

Department store operator Macy's reported stronger-than-expected October sales, prompting the chain to raise its same-store sales outlook for the second half of the year.

Sandy affected 200 of Macy's namesake and Bloomingdale's stores, but the company said it was "confident" that it could make up most of the lost sales.

Target same-store sales missed analysts' expectations.

October is usually a light month for retail sales, falling right after the back-to-school season and just before the holiday shopping frenzy kicks in.

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