U.S. retailers' October sales rise, but holiday concerns remain
By Phil Wahba
By Phil Wahba
(Reuters) - Costco Wholesale Corp and Victoria's Secret parent L Brands Inc were among the major U.S. retailers to report same-store sales gains for October, but the outlook remained downbeat heading into the holiday season.
Costco on Thursday reported a slightly bigger-than-expected 3 percent gain in sales at stores open at least a year. Fresh food was among its best-selling categories, and consumer electronics was the weakest.
L. Brands said its same-store sales were up 8 percent, well above the 2.2 percent gain Wall Street analysts were expecting, according to Thomson Reuters. The company and other clothing retailers benefited from cool weather that spurred spending at their stores.
Analysts on average expect the Thomson Reuters same-store sales index of nine U.S. retailers that report these monthly results to post a 2 percent gain for October, below the 5.7 percent jump a year earlier.
Gap Inc will report after the market closes.
The 16-day U.S. government shutdown at the start of the month weighed on consumer confidence and slowed job growth. U.S. job growth probably slowed sharply in October, with the unemployment rate ticking higher, according a Reuters survey of economists published this week.
Still, cool weather helped some retailers, such as low-priced clothing chain Cato Corp, as shoppers replenished their autumn wardrobes.
Looking ahead, the company was less optimistic. "We continue to expect a difficult sales environment through the fourth quarter," said Chief Executive Officer John Cato.
Morgan Stanley last week issued a research note forecasting the weakest holiday season since 2008, when the financial crisis decimated retail sales.
Other retailers to sound a cautious note about the holiday season recently include teen clothing chain Abercrombie & Fitch Co.
Last week, drugstore chains Walgreen Co and Rite Aid Corp reported higher overall sales for October. But in both cases, the gains stemmed from higher prescriptions sales, with weaker results for general merchandise caused by fewer visits to stores.
Teen retailers The Buckle and Zumiez Inc reported modest same-store sales gains for October.
(Reporting by Phil Wahba in New York; Editing by Lisa Von Ahn)