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Thursday November 5, 06:40 PM
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U.S. Oct retail sales slightly ahead of estimates
By Nicole Maestri
NEW YORK (Reuters) - U.S. retail chains reported October sales slightly ahead of Wall Street expectations as consumers' austere approach to shopping slowly warms before the holiday season.
Costco Wholesale Corp said its October sales at stores open at least a year, or same-store sales, rose 5 percent, above analysts' expectation for a 4.7 percent gain, according to Thomson Reuters data.
While the warehouse club operator was helped by a weak U.S dollar, which boosted overseas sales, same-store sales in categories besides food, like sporting goods, cameras and small appliances, were positive.
Sales at Children's Place Retail Stores Inc and Hot Topic Inc fell less than Wall Street expected, and Hot Topic said it expects third-quarter earnings at the high end of its previous forecast.
In an early tally of results, 60 percent of retailers posted sales that beat expectations, while 40 percent came in below estimates, according to Thomson Reuters. That was based on reports from 11 out of 30 companies tracked.
October typically offers retailers a break between September's back-to-school shopping season and November's mad dash to kick off the pre-Christmas sales rush.
But this year, October sales are being watched closely for signs that a consumer recovery is taking hold heading into the holidays and that September's better-than-expected sales were not a fluke.
SALES MOMENTUM OR FLUKE?
Last October, same-store sales plunged 4.1 percent as a financial crisis threatened to derail the U.S. economy, and consumers halted spending as a plunging stock market vaporized household savings.
October's same-store sales were forecast to rebound from those lows to post a 2.0 percent gain, according to Thomson Reuters data.
Analysts steadily raised their sales estimates as the month progressed. Less than a week ago, the prior forecast was for October same-store sales to rise 1.2 percent.
"Analysts kept saying that traffic in stores was improving, driven by colder weather, which helped the sale of fall merchandise," said Jharonne Martis, director of consumer research for Thomson Reuters.
According to weather-tracking firm Planalytics, it was the coldest October in the United States since 1976 and the wettest in 50 years. That drove demand for wiper blades, snow-removal equipment, long-sleeved shirts and portable heaters.
Big Lots Inc said its third-quarter same-store sales fell 0.2 percent, but the decline was not as large as Wall Street expected. The company said sales trends improved after the Labor Day holiday in early September.
But not all retailers posted results above expectations. Same-store sales at Limited Brands Inc fell 4 percent, while Wall Street expected a decline of 2.7 percent. Buckle Inc's October same-store sales rose 4.3 percent, missing expectations for an increase of 5.3 percent.
(Reporting by Nicole Maestri; editing by John Wallace)
