U.S. retailers posted mixed December sales, hurt by warm weather and procrastinating shoppers who waited for deep discounts before wrapping up their holiday shopping.
The lackluster sales could dent fourth quarter profits, with retailers like Federated Department Stores, Chico's FAS, and Cache warning their results could be less than expected.
"This is going to be the third month in row ... that the majority of retailers in our index have missed expectations," said Ken Perkins, president of Retail Metrics, which tracks 57
retailers. "That's a little bit concerning as we head into '07," he told Reuters.
He said the emphasis has shifted to January, with hopes that consumers will flock to stores to redeem gift cards they received for the holidays. Retailers, who book revenues after the cards are used, hope customers spend more once they get to stores.
So far, more retailers have missed expectations for December sales than beat them. Of the 55 retailers that have reported thus far, nearly 53% missed forecasts and about 47% beat estimates, according to Thomson Financial. December same store sales -- or sales at stores open at least a year -- rose 3.3% on average, slightly ahead of Thomson's 3.0% forecast.
"Customers were just not out buying early seasonal categories like apparel, sweaters and outerwear," Jeff Klinefelter, retail analyst with Piper Jaffray, told CNBC. "We think that hurt retailers and cut back on some of the traffic...Though, a lot is yet to be seen in January. The season is not over yet, but...it is below expectations."
Wal-Mart Stores , the world's largest retailer, confirmed its preliminary report that December sales at U.S. stores open at least a year rose about 1.6%, its biggest increase since August. The rise topped initial expectations for a 1% gain. Wal-Mart cited strength in electronics and holiday items, but acknowledged seasonal apparel sales were soft.
But the discount retailer remained cautious for the current month, predicting a rise of 1% to 2% in January same-store.