Sector Snap: Department store stocks mostly fall

AP News
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Posted: Dec 03, 2009 11:45 AM

Shares of department store operators mostly declined Thursday as many reported lackluster November sales at stores open at least a year.

This sales figure is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Many retailers realized that encouraging sales results over the Thanksgiving weekend were not enough to offset soft spending the rest of the month. Consumers have continued to keep a close eye on their spending, as they worry about unemployment and ongoing economic concerns.

"We believe a lack of liquidity on the part of the consumer, driven by lack of credit availability and higher unemployment, weighed on (overall sales) results," Janney Capital Markets analyst David Strasser said in a client note.

Signs of the continued discretionary spending clampdown was evident among most department store operators' monthly results. Macy's Inc. said sales at store open at least a year fell 6.1 percent last month, while J.C. Penney Co. reported a 5.9 percent decline in the key sales figure for November.

Shares of Macy's dropped 67 cents, or 4.1 percent, to $15.63 in morning trading, while J.C. Penney's stock slipped 69 cents, or 2.4 percent, to $28.48.

Other retailers also reporting declines in sales at stores open at least a year during November included Stage Stores Inc., Fred's Inc., Dillard's Inc. and Bon-Ton Stores Inc. All four companies' shares traded lower Thursday morning.

Luxury department store operators like Saks Inc. and Nordstrom Inc. were a bit mixed, with sales at Saks stores open at least a year down 26.1 percent and Nordstrom's sales up 2.2 percent. At privately held Neiman Marcus Inc., which runs Bergdorf Goodman stores as well as its namesake shops, sales at stores open at least a year declined 7.5 percent in November.

Shares of Saks' shares fell 15 cents, or 2.4 percent, to $6.06, while Nordstrom's stock added 48 cents to $35.20.

Aside from Nordstrom, another bright spot was Kohl's Corp., which reported its key sales figure climbed 3.3 percent. The company's stock gained 12 cents to $53.85.