Sector Snap: Retail revenues top expectations
Analyst says retailers posted better-than-expected Dec. revenue, promotions under control
NEW YORK (AP) -- Retailers reported better-than-expected revenue in December, with promotions relatively under control, an analyst said Thursday.
Earlier in the day many retailers reported their December results for revenue at stores open at least a year. This figure is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.
.December was eyed closely by investors and analysts because it contains the holiday shopping season. The November through December period is critical for retailers because it can make up to 40 percent of their annual revenue.
Twenty retailers reported that revenue at stores open at least a year climbed an average of 4.5 percent in December compared with the year-ago period, according to the International Council of Shopping Centers. That's on the high end of the expected range of 4 percent to 4.5 percent.
Jefferies analyst Randal Konik said in a client note that the results may be partly due to improving consumer confidence and the holidays making shoppers more willing to spend.
"Retailers also did a good job keeping merchandise fresh and price points sharp," he added.
Looking at Gap Inc., Konik said that Old Navy was a standout — with its revenue at stores open at least a year up 13 percent in December. The analyst said that the performance should quell investors' concerns about the brand's turnaround "and shows that the fundamental business is firmly on track now that the marketing campaign and price points have been corrected."
Gap's stock added 84 cents, or 2.7 percent, to $32.21 in afternoon trading.
Here's how some other retailers are faring:
Target Corp. rose $1.87, or 3.4 percent, to $60.69.
Nordstrom Inc. gained $1.83, or 3 percent, to $55.46.
Kohl's Corp. rose 8 cents to $42.29.
Ross Stores Inc. climbed $4.43, or 8.1 percent, to $58.87.
TJX Cos. added $1.45, or 3.4 percent, to $44.61.
Macy's Inc. shed 15 cents to $38.16.
Pier 1 Imports Inc. rose 69 cents, or 3.5 percent, to $20.69.
