No. 1 retailer posts solid gain to start the holiday shopping season; many other merchants take a beating.
By Parija B. Kavilanz, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) — Wal-Mart Stores reported November sales that trounced expectations Thursday as the discounter continues to gain market share from its rivals in a worsening economy.
But the picture wasn’t so jolly for many other leading store chains as more Americans retrenched on unnecessary purchases.
Wal-Mart (WMT, Fortune 500), the world’s largest retailer, said its same-store sales, or sales at its stores open at least a year, rose 3.4%, beating its own forecast for a 1% to 3% increase in the measure for the month.
Analysts had expected the retailer to log a 2% sales increase for the month, which also included sales on Black Friday, or the day after Thanksgiving, which unofficially marks the start of the holiday shopping season.
However, Wal-Mart executives tempered the positive news, citing the death of a temporary worker at one of its stores on Black Friday.
“Our sales news is overshadowed by the tragic incident at our Valley Stream, New York store on November 28. We consider Mr. Jdimytai Damour part of the extended Wal-Mart family and are saddened by his death,” Eduardo Castro-Wright, vice chairman of Wal-Mart, said in a statement.
During the month, Wal-Mart said the drop in gas prices put more money in the pocket of its mostly paycheck-to-paycheck shoppers. As a result, the company said consumers shopped more frequently at its stores.
The retailer is also benefiting from more higher income shoppers trading down to its value-priced products.
Additionally, the company said its aggressive holiday discounts also drove “record grocery sales” in November and lifted sales in the home, clothing and electronics categories.
For December, Wal-Mart expects sales to be at the high-end of its forecast for a 1% to 3% gain.
Other chain stores also reported their November same-store sales Thursday. Thomson Reuters, which tracks sales at 35 retailers, said 24 other merchants besides Wal-Mart had already reported their results. Of those 24, 52% missed forecasts while 48% beat analysts’ sales estimates.
Among those hardest hit last month – teen clothing chain Abercrombie & Fitch (ANF) posted a stunning 28% plunge in same-store sales, sales at Gap Inc. (GPS, Fortune 500) fell 10% and Limited Brands (LTD, Fortune 500), which owns Victoria’s Secret and Bath & Body Works stores, posted a 12% same-store sales drop.
The firm forecast that last month’s overall same-store sales will show a 2.4% decline.
If the figures come in as expected, that monthly decline would mark the weakest same-store sales results ever registered since Thomson Reuters first started tracking the estimates in 2000.