Good News For Retail Industry
Wonderful news for retail! January sales at top U.S. retail chains shifted gears and took a positive turn from last year’s decline, possibly because many avoided drastic clearance sales, and shoppers cashed in on the holiday gift cards.
Costco Wholesale Corp, and Limited Brands were among the number that came in ahead of Wall Street Expectations. Apparel retailers Hot Topic and Wet Seal posted declines that were even worse than were forecast.Twelve retailers were tracked by Thomson Reuters, and five of them beat estimates, while six came in below forecast. Eighteen other store chains were due to report as well.
January is looked upon as the least important month of the holiday fourth quarter because it accounts for the smallest portion of its sales. But the fact that retailers avoided the insane clearance sales that hurt January sales last year, and with customers cashing in on gift cards received in December lends to the idea that some of these companies could raise their earnings forecasts.
Costco said that same store sales climbed by eight percent in January which is better than the 7.8 percent increase that was expected. The wholesale club also increased 25 percent at its international divisions. Sales at Limited Brands rose to 6 percent, topping the Wall Street predictions for a half of a percent increase. Retailers’ observations about sales trends — especially whether traffic weakened considerably at the end of January — may be a signal to how consumers will spend this quarter.
Some analysts worry, believing that the stronger than expected holiday sales pulled spending forward. That would mean that retailers might have a difficult time recruiting shoppers in the first quarter, especially if cold weather trumps demand for spring merchandise.
But all in all, promising news.
Mallory McGuinness works for a debt collection company. Also, she composes articles on business and finance, the credit industry and debt collection.
