November Same-Store Sales Preview

On Thursday retailers are expected to report November Same-Store Sales (ZUMZ after the close today, HOTT already reported before the open)... November sales are predominantly derived from the Black Friday weekend. Although trends in traffic improved year over year, consumer spending was softer than expected... According to ICSC( International Council of Shopping Centers) /Goldman Sachs data, November comparable store sales are expected to increase 3-4% YoY, excluding Wal-Mart (but ICSC previously predicted gain of as much as 6%). Redbook data supports slightly lower figure with expected sales to be up ~2.2% YoY and up 4.8% from October, excluding Wal-Mart.

Many shoppers may be waiting for aggressive promotional activity as the Christmas holiday nears. ICSC reported that on average consumers completed 42% of their holiday shopping over the Black Friday weekend versus 48% a year ago. As a result, retailers could see further upside in December sales (although the data also leaves room for uncertainty in the overall holiday outlook)... Another notable change in activity is the increasing number of consumers turning to online shopping. According to comScore data, November online spending increased 3% vs last year, Black Friday weekend online spending increased 5% and Cyber Monday online spending also increased 5%.

Going forward, the 2009 holiday outlook still remains blurry. While optimists are hoping for the procrastinating shoppers to emerge, pessimists' concerns still reside with high unemployment and the curtain of uncertainty holding back consumers.

During the month of November, several retailers issued and/or updated guidance. The majority of retailers raised or issued guidance above consensus.

After a modest pullback in October, overall equities climbed higher during the month of November with retailers climbing alongside. The S&P Retail Index (RLX) increased 5.7% in November (following +0.8% in October, +3.6% in September, +2.8% in August) while the SPDR S&P Retail index (XRT) increased 2.4% (following -1.1% in October, +6.5% in September, +5.1% in August). For comparison the S&P 500 Index (SPX) increased 5.7% (following -2.0% in October, +3.6% in September, +3.4% in August).
The following are a few names that beat/missed expectations and the stock price reaction to the numbers... Some cos that beat October Same-Store Sales estimates include (listed according to the magnitude of the beat): Bon-Ton Stores (BONT) 3.1% vs. -4% consensus, stock gapped up 1.6% to $9.66 and closed up 14% to $10.84... American Apparel (APP) -6% vs. -12% consensus, stock gapped up 4.6% to $2.71 and closed up 1.5% to $2.63... Wet Seal (WTSLA) -1.3% vs. -7.3% consensus, stock gapped up 4.3% to $3.42 and closed up 3.4% to $3.39... Stage Stores (SSI) -0.1% vs. -4.4% consensus, stock gapped up 1.7% to $11.97 and closed up 5.2% to $12.38... Saks (SKS) 0.7% vs. -3% consensus, stock gapped up 5.9% to $5.9 and closed up 5.9% to $5.9... Some cos that missed October Same-Store Sales ests include (listed according to the magnitude of the miss): Aeropostale (ARO) 3% vs. 13.5% consensus, stock gapped -9.3% to $34.5 and closed -12% to $33.47... American Eagle (AEO) -5% vs. 1.9% consensus, stock gapped -10.2% to $16.04 and closed -11.6% to $15.79... Kohl's (KSS) 1.4% vs. 5.8% consensus, stock gapped -3.9% to $54.35 and closed -1% to $55.95... Cato (CATO) 0% vs. 4% consensus, stock gapped 1.9% to $19.99 and closed 4.4% to $20.48... Zumiez Inc (ZUMZ) -8.9% vs. -6.5% consensus, stock gapped -0.4% to $13.4 and closed -7.2% to $12.49.

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