Weak sales at leading U.S. retailers in early November dragged down their results for the month as the effects of major Northeast storms offset brisk activity over the long Thanksgiving weekend.
Retailers on average reported a 1.6 percent increase in sales at stores open at least a year, about half the 3.3 percent rise that analysts had forecast and less than last year’s gain of 3.5 percent, according to Thomson Reuters I/B/E/S.
Target and Macy’s, two of the biggest companies to report monthly sales on Thursday, missed analysts’ expectations. Both had weak sales at the beginning of November, when Superstorm Sandy and another storm hit the Northeast.
“We would probably have seen just blockbuster numbers had it not been for Sandy and the nor’easter, the back-to-back storms in the Northeast,” said Alison Paul, U.S. retail and distribution leader and vice chairman for Deloitte, an advisory and consulting firm.
In addition, increased online shopping and layaway sales hurt November results, said Michael Niemira, chief economist at the International Council of Shopping Centers.
Retailers do not book layaway sales until they are fully paid for and do not book online sales until the products are shipped. Niemira expects layaway and online shopping to help same-store sales in December. Wal-Mart, Kmart and Toys R Us — none of which report monthly sales — have been promoting layaway this season.
Cyber Monday, the Monday after Thanksgiving, was reportedly the biggest online shopping day ever, but it came after the November sales period ended.
Kohl’s posted a surprising drop in November same-store sales, and its stock fell 12 percent Thursday. It said strong online sales late in the month would fall largely in December’s sales tally.
The Standard & Poor’s 500 retail index was down 0.5 percent Thursday, while the broader S&P 500 index rose 0.4 percent.
Sales for the November-December holiday season look set to rise 4.1 percent, to $586.1 billion, this year after a 5.6 percent increase in 2011, according to a National Retail Federation forecast given weeks before the Northeast storms. Other forecasts also hover around 4 percent.
During the long Thanksgiving weekend, sales rose 12.8 percent, to $59.1 billion, compared with a 16.4 percent jump for the comparable weekend in 2011, according to an NRF survey.
“I think it’s going to be a solid holiday, but we’re not going to break any records,” said Madison Riley, managing director at retail consulting firm Kurt Salmon.