U.S. Retail Sales in October Trail Analyst Estimates

Nov. 8 -- Wal-Mart Stores Inc., Macy's Inc. and other U.S. retailers reported October sales that missed analysts' estimates after consumers limited spending and curbed purchases of jackets and fleece pullovers due to warmer weather.

Sales at stores open at least a year at Wal-Mart, the world's largest retailer, increased 0.4 percent, trailing the average analyst projection for a 1.1 percent gain in a Retail Metrics LLC survey. Same-store sales fell at Macy's, the second- largest U.S. department-store chain, Gap Inc. and Nordstrom Inc.

Lower U.S. home values and higher gasoline prices prompted consumers to avoid the malls while the warmest October ever in many Northeastern cities sapped demand for cold-weather items. Holiday shoppers may rein in spending, causing stores to ramp up discounts during the most important retail period of the year.

``If I have a limited budget, I'm not going to go out and buy all those extra items,'' said Marshall Cohen, head retail sales analyst at NPD Group Inc.

U.S. October retail sales probably increased 2 percent, the International Council of Shopping Centers and UBS Securities LLC said Nov. 6. The estimate has declined from as high as 2.5 percent last month.

Same-store sales are considered a key measure of a retailer's performance because it excludes locations that have recently opened or closed. Most retailers report today.

Holiday Sales

Retail research organizations have forecast slowing holiday sales. The National Retail Federation and TNS Retail Forward both anticipate the smallest holiday sales gain in five years as consumers cope with higher prices. The NRF includes purchases in November and December in its forecast. TNS uses sales during October, November and December.

Wal-Mart's results were within the company's forecast for October sales to gain as much as 2 percent. The retailer said November sales will increase as much as 2 percent. It introduced earlier discounts on toys and other merchandise this year, marking down 20 percent more items than last Christmas.

Nordstrom posted a 2.4 percent decline, missing analysts' estimates for an increase of 1.3 percent, according to Retail Metrics, a research firm based in Swampscott, Massachusetts. Macy's said sales declined 1.5 percent, more than the 0.6 percent dip analysts estimated.

Gap Sales Fall

Gap, the largest U.S. clothing retailer, said same-store sales last month fell 8 percent, trailing the analyst estimate for a drop of 4.7 percent. Limited Brands Inc., the owner of the Victoria's Secret lingerie chain, said same-store sales slumped 6 percent, four times the average analyst estimate for a 1.5 percent decline.

Chico's FAS Inc., a women's apparel retailer, said October sales fell 10.6 percent. Analysts forecast a drop of 5.9 percent. Abercrombie & Fitch Co. and AnnTaylor Stores Corp., the clothing retailer that caters to women 25 to 55, also posted declines that missed analysts' estimates.

AnnTaylor said it reduced its full-year earnings forecast because of ``dramatic traffic softness'' and ``ongoing macroeconomic uncertainty.''

Consumer confidence fell last month to the lowest level in two years, the Conference Board said on Oct. 30. Sales of new homes declined 45 percent to an annual pace of 770,000 units in September from a peak of 1.389 million in July 2005.

October temperatures in the eastern two-thirds of the U.S. averaged 5 degrees to 8 degrees Fahrenheit above normal, while New York City posted the warmest October ever recorded, according to Planalytics Inc., a weather-consulting firm based in Wayne, Pennsylvania.