The Best Ever Festive Season For Retailers In US
The Retail Metrics Index recently reported better-than-expected 5% growth in same-store sales for the nine weeks of November and December. Analysts expected 3.8% growth on an average. It is said to be the best ever performance since tracking of such data started in 2000.
The growth is certainly attributed to improved consumer sentiments amid declining crude prices and remarkable jobs data. The University of Michigan survey reported biggest consumer sentiment gains along the poorest and middle third of the income group that benefited from the decline crude prices.
However, analysts also point to consider other factors, besides consumer sentiments, contributing to stellar U.S. retail performance during the holiday season. Gallup reported that 81% of poll participants were satisfied with their standard of living. This helped the standard of living index achieve its seven-year high in December. Analysts also expressed concerns about sluggish wage growth of 1.7% during 2014 compared to 1.9% growth reported in the previous year.
Savings of $1,400 per household from Oil
Analysts at Citigroup Inc (NYSE:C) projected a drop in oil prices to result in savings of $1,400 per household on average. However, they also pointed at high levels of household debt burdens, which would effectively lower consumer spending.
Retailers Posted Growth, Higher Guidance
Struggling retailers like J C Penney Company Inc (NYSE:JCP) also reported encouraging 3.7% increase in comparable sales during the holiday season. J C Penney also forecasted same-store sales to achieve higher end of its previous guidance of 2-4% during the fourth quarter. Macy’s, Inc. (NYSE:M) and Urban Outfitters, Inc. (NASDAQ:URBN) also reported 2.7% and 4% growth over the same period, respectively.
Several retailers including Zumiez Inc. (NASDAQ:ZUMZ), Aeropostale Inc (NYSE:ARO) and American Eagle Outfitters (NYSE:AEO) raised their guidance driven by better than expected holiday season sales.
However, it wasn’t all rosey for retailers as, Toys R Us faced 2.7% decline in same store sales, with domestic sales plunging 5% during the holiday season.
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