The retailer's same-store sales dropped 1 percent for the month, surprising analysts.
Updated: November 29, 2012 - 10:49 PM
Target Corp. said Thursday that sales at stores open for at least a year fell 1 percent in November, a surprisingly weak performance for a retailer that has enjoyed robust sales growth for most of the year.
Target had not recorded a decrease in comparable-store sales since March 2011.
The Minneapolis-based retailer said it generated $6.2 billion in sales for the four weeks ended Nov. 24, a decrease of 0.1 percent from the same period a year ago. So far this year, sales are up 3.8 percent to $55.8 billion with comparable-store sales rising 3.2 percent.
The numbers suggest that consumers withheld their spending until the end of the month to take advantage of Black Friday-related deals, while superstorm Sandy disrupted store operations in the Northeast earlier this month.
"November sales were below our expectations, reflecting weaker-than-planned sales performance in the first two weeks combined with stronger sales growth across all channels later in the month," CEO Gregg Steinhafel said.
Eighteen retailers on Thursday reported that November sales at stores open at least a year -- an indicator of a retailer's health -- through last Saturday were up 1.7 percent compared with the year-ago period, according to the International Council of Shopping Centers. That's well below the group's earlier forecast for a gain of 4.5 percent to 5.5 percent.
Marshal Cohen of the NPD Group, a consumer market research firm, said department stores, catalog and mass merchants all had challenges. "There was a lot of consumer distraction in late October and early November -- the election and the threat of a fiscal cliff," he said.
Nordstrom recorded a 1.1 percent decline in November, blaming the weakness not only on Sandy but also on tepid customer response to its semi-annual sales in the first half of the month. The November figure was Nordstrom's first monthly decline since September 2009, when it had a 2.4 percent drop.
Macy's revenue at stores open at least a year fell 0.7 percent in November, compared with the 1.5 percent increase analysts expected. It was Macy's first monthly sales drop since a 6.1 percent decline in November 2009.
"Despite the largest-volume Thanksgiving weekend in our company's history, we were not able to overcome the weak start to the month, which included the disruption of Hurricane Sandy," said Terry Lundgren, Macy's CEO.
The disappointing November sales reports come after robust sales over the Thanksgiving weekend, the official kickoff to the holiday shopping season. A record 247 million shoppers visited stores and websites over the four-day period that started on Thanksgiving this year, up 9.2 percent from last year, according to a survey of 4,000 shoppers that was conducted by research firm Biginsight for the National Retail Federation.
Britt Beemer of America's Research Group in South Carolina said one factor in the early November lull could be that consumers in swing states didn't see any retail advertising on television until after the election. "Candidates took all the airtime," he said.
Consumers also appeared to be storing up their demand and waiting for good deals. Some of them snapped up bargains during Black Friday week, but many of them are still waiting for better deals.
It's a boxing match between the retailer and the consumer. "Consumers are waiting for better deals in December," Cohen said. "Target and other retailers will make up the missed November sales in December."
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