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After a nasty October surprise, retailers are putting on a brave face for the holidays.
Big chains like Macy’s, Gap and Target said they remain optimistic about the outlook for Christmas shopping despite disruptions and store closures from Hurricane Sandy.
To be sure, some industry experts remain worried that East Coast consumers may be too hard-hit by the historic storm to fully recover before Christmas.
“The cost of cleanup and repairs from the hurricane could take money away from holiday purchases, which puts early holiday sales at risk,” Citigroup analyst Deborah Weinswig said in a research note yesterday.
Nevertheless, Macy’s, which was forced to close more than 200 stores early this week, said it’s “confident that it can make up some or most of the lost sales through the remainder of the quarter.”
The department-store giant said yesterday that its October same-store sales — or sales at stores open at least a year — rose 4.1 percent, beating Wall Street’s 3.1 percent forecast.
Analysts noted that the October period for retailers technically ended last Saturday, before the hurricane hit the Northeast, putting some weather-related risk on November’s numbers.
Upscale Nordstrom also posted better-than-expected results last month, with same-store sales up 9.8 percent versus analysts’ estimates of 6 percent growth.
The hurricane that was dubbed “Frankenstorm” gave retailers a fright this week. While chains such as Home Depot, Costco and Walmart got raided for flashlights, batteries, and bottled water, business looked weak at apparel stores.
But yesterday, the Conference Board reported that consumer confidence in October climbed to its highest levels since February 2008 as joblessness dropped and home prices rose.
That’s an indication that retailers stand a good chance to recover ground lost this week as soon as month’s end, says Michael Niemira, chief economist at the International Council of Shopping Centers.
Overall, retailers posted a better-than-expected 5-percent same-store sales gain last month, according to the trade group. That’s ahead of the pace seen in August and September, and Niemira is forecasting a 5.5-percent increase this month.
Gap and Target both posted same-store sales gains that missed the Street’s estimates. Still, both chains said they’re upbeat heading into the holiday crunch.
“We’re very pleased with the continued momentum in the business across all brands in North America,” Gap Chief Executive Officer Glenn Murphy said.
Sandy’s fury “certainly disrupted” business on the East Coast, said John Morris, retail analyst at BMO Capital Markets. The storm, however, “fell between two seasons—fall and holiday—so the overall effect on the quarter likely won’t be as bad as some fear.”