Newspaper article The Florida Times Union

Retailers Face Uncertain 2006; Locally, Stein Mart Says Sales Were Basically Flat Last Month, Compared to a Strong December 2004

Newspaper article The Florida Times Union

Retailers Face Uncertain 2006; Locally, Stein Mart Says Sales Were Basically Flat Last Month, Compared to a Strong December 2004

Article excerpt

Byline: MARK BASCH

Stein Mart Inc. Thursday lowered its fourth-quarter earnings forecast after reporting disappointing December sales, as the nation's major retailers overall reported a mixed-bag of holiday season results.

Analysts said retailers face an uncertain 2006 after December sales figures showed that the holiday shopping season, while overall respectable, was disappointing for some of the nation's most prominent merchants. As expected, Wal-Mart Stores Inc. was one of the stragglers, falling short of Wall Street's expectations and warning about its fourth-quarter profits.

As stores reported their monthly results, the winners included Target Corp., Costco Wholesale Corp., Nordstrom Inc., and teen retailers such as Abercrombie & Fitch Co.

Jacksonville-based Stein Mart, which operates 262 retail fashion stores, said total sales for the five weeks ended Dec. 31 fell 5.4 percent to $211.8 million and comparable store sales dropped 6.1 percent.

Stein Mart Chief Executive Michael Fisher said in a statement that men's and ladies' apparel sales were basically flat last month, compared to a strong December in 2004.

"However, December's results were most dramatically impacted by a double-digit sales decrease in the home division due to significant reductions in the overall home and holiday decor inventories," he said.

Following the disappointing holiday season, Stein Mart is now forecasting comparable store sales for the entire fourth quarter ending Jan. 28 to be down 5 percent to 6 percent from last year, which would produce earnings of 36 cents to 39 cents a share. That's down from 54 cents a share last year and down from the company's previous forecast of 47 cents to 50 cents.

Analysts said that the national retail sales data for the holidays shows that consumers, mindful of the rising costs of energy and borrowing money, were particularly cautious during the holidays.

"This is not a great showing, but not a poor showing. It is somewhere in between," said Michael Niemira, chief economist at the International Council of Shopping Centers. "Consumers are not splurging everywhere. It is a little here and there. The consumer is very selective."

One potential bright spot is a steadily improving job market, whose gradual recovery helped boost consumer confidence last month. The Labor Department reported Thursday that the number of newly laid-off workers filing claims for unemployment benefits fell to the lowest level in more than five years last week.

"As long as people can find the right merchandise, have a job and borrow a little bit, they are going to go shopping," said Richard Hastings, an analyst at Bernard Sands LLC, who was more positive about consumer spending. "Overall, the holiday season was good. Retailers who had it all nailed down were the winners. …

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