US Retailers’ December Sales Beat Estimates Amid Job Growth

NEW YORK, United States — U.S. retailers including L Brands Inc., Pier 1 Imports Inc. and Gap Inc. posted December same-store sales that topped analysts' estimates as improving employment and falling gas prices encouraged shoppers to spend on gifts.

Same-store sales for retailers tracked by Swampscott, Massachusetts-based Retail Metrics Inc. rose 2.9 percent last month, excluding results from drugstores. Analysts had estimated a 2.8 percent gain.

Retailers offered deep holiday discounts to lure customers, while lower unemployment and cheaper fuel spurred shoppers to spend more. Companies started promotions earlier than ever this holiday season and kept customers coming out to stores with the expectation that they’d be able to buy gifts at steep discounts.

“It sounds like Thanksgiving and into Christmas was generally good,” Simeon Siegel, a New York-based analyst at Nomura, said in an interview before the release. “Expectations were set low.”

Gap, the largest U.S. apparel-focused retailer, said comparable-store sales climbed 1 percent last month, exceeding estimates for a 0.1 percent gain. Value-driven brand Old Navy led the San Francisco-based company's sales, posting an 8 percent increase last month, beating estimates for 3.3 percent growth.

Comparable sales at the Gap brand fell 5 percent last month, worse than the 3.8 percent decline predicted. The Banana Republic chain posted same-store sales that were little changed, missing estimates for a 0.1 percent gain.

L Brands

L Brands, the Columbus, Ohio-based company that owns Victoria’s Secret and Bath & Body Works, said in a statement today that comparable-store sales rose 4 percent last month, exceeding estimates for a 3.5 percent increase.

Macy’s Inc. said today that same-store sales in November and December rose 2.7 percent. The Cincinnati-based company maintained its full-year earnings forecast and said same-store sales for the fourth quarter may gain 2.5 percent to 3 percent, up from a previously forecast range of 2 percent to 3 percent. The company plans to close 14 Macy’s stores in the spring and anticipates adding as many as 1,500 new full-year and seasonal employees in 2015.

Pier 1, the home-furnishings retailer, saw same-store sales in December jump 8.2 percent, the company said in a statement today. Chief Executive Officer Alex Smith said the company is well-positioned for the early spring season. The Fort Worth, Texas-based chain will report fourth-quarter earnings April 8.

Most chains tally same-store sales using locations open at least a year, making the figure a closely watched gauge of a retailer’s health because it tracks only established stores.

J.C. Penney

J.C. Penney Co., the department-store chain trying to orchestrate a turnaround, said sales growth picked up over the holidays. Sales increased 2.7 percent during the nine-week shopping season, and the Plano, Texas-based retailer expects growth this quarter to be at the upper end of a predicted range of 2 percent to 4 percent.

Bed Bath & Beyond Inc. today posted sales results for the three months leading up to the heart of the holiday season that missed expectations. Comparable-store sales at the Union, New Jersey-based chain rose 1.7 percent last quarter, missing estimates compiled by Consensus Metrix for a 2.8 percent increase. The shares fell as much at 6.5 percent to $74.26 in extended trading in New York.

For most retailers, spending in December may have been fueled by sustained growth in the job market. Companies added 241,000 employees last month, more than forecast, according to ADP Research Institute figures released yesterday. Labor Department data scheduled for release tomorrow may show payrolls climbed by 240,000 workers last month, according to the Bloomberg Survey median.

Gasoline prices continued to fall, leaving consumers with more cash to spend on gifts. The national average for regular yesterday was $2.182, data compiled by the Florida-based motoring club AAA show. That’s down from last year’s high of almost $3.70.

By Lindsey Rupp. Editors: Nick Turner, Kevin Orland, John Lear.