Retailers got a much-needed boost in January after a lackluster holiday shopping season, using post-holiday clearance deals to lure cagey consumers worried about higher payroll taxes.
H&M's coupon for 30% off this week drew Toluca Lake payroll accountant Katy Genovese to the store at the Americana at Brand shopping center. She walked out with a $20 dress and $30 in shirts.
Genovese, 57, and her shopping partner, Lori Berlanga, 45, said they spent January hitting up malls for bargains that are increasingly plentiful and longer-lasting. Instead of targeted discounts on specific items, retailers are offering more storewide deals with deeper markdowns.
"We celebrated Christmas after Christmas to hit all the sales," said Berlanga, a Studio City film production coordinator. "Stores are being much more competitive with each other."
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For a cross section of major retailers, that translated into a 5.8% sales upswing last month from January 2012. Analysts had expected a 3.5% boost.
The data from Thomson Reuters feature a roundup of 18 retailers' same-store sales, which account for revenue at retail locations operating for at least a year to strip out the fluctuations of recent openings and closings.
Some experts say the figures represent at most a snapshot of retail health because the report doesn't include behemoths such as Wal-Mart Stores Inc. and Best Buy Co. And more chains, including Macy's Inc. and Target Corp., are planning to ditch their monthly sales reports to focus on quarterly earnings.
The numbers that retailers did disclose surprised analysts with their strength, given the economic strain weighing down shoppers.
A higher payroll tax went into effect last month. Consumer confidence slid to its lowest level since November 2011, according to the Conference Board last week.
"Our guests continue to shop with discipline in the face of a slow economic recovery and new pressures," Target Chief Executive Gregg Steinhafel said.
The discount chain still enjoyed a 3.1% increase in same-store sales, which he attributed to holiday inventory clearance.
"The good news is that consumers are still showing resilience despite the increase in taxes," said Marshal Cohen, an analyst at the research firm NPD Group. "The bad news is that a lot of that business came at a discount as pent-up demand from December rolled over into January."
Department stores were the best-performing retail segment, bumping up 8.1% in January, according to a separate report from Retail Metrics Inc. analyst Ken Perkins.
Macy's was so heartened by its 11.7% advance in January that it raised its earnings forecast for its fiscal fourth quarter, which it will report Feb. 26. The retailer, which also owns the Bloomingdale's brand, predicts fourth-quarter earnings of $1.94 to $1.99 a share, up from its earlier projection of $1.91 to $1.96.
Perkins deemed teen apparel sellers the worst in show, with the sector taking a 2.2% dip. Wet Seal Inc., which is based in Foothill Ranch, suffered a 9.4% same-store sales slump.
Anthropologie and Free People owner Urban Outfitters Inc. said independently that comparable sales from its stores were flat for its fourth quarter, which ended Jan. 31.
Some shoppers spent January in hibernation.
North Hollywood actor Topher Johnson, 22, said he "got carried away" hunting through Black Friday sales in November and spending some $600 on Christmas presents. Now, with his tax refund coming and work starting to pick up after the holiday slump, he said he's slowing ratcheting up his purchases.
"January, though, was only food, gas and random stuff," he said.
The persistent cold weather was a mixed blessing, Perkins said. Sales of outerwear, which had lagged during the warm December, perked up.
But once after-holiday sales waned, the frigid temperatures caused shopper traffic to slow toward the end of the month, he said. Moving into February, the chilly climes could dampen sales of home improvement products and lighter apparel starting to roll out for spring.
"Valentine's Day and Presidents Day are blips on the retail radar screen," Perkins said. "There really aren't any spending catalysts until the weather warms up."
The trade group International Council of Shopping Centers, in yet another same-store sales report, said that chain retailers in the U.S. — including drugstores buoyed by flu shots — posted a 4.5% gain in January. The jump was the largest since September 2011.
This month, however, the group predicts that the growth rate will sink to roughly 3%.
"There's no ebullient retail sales trend showing that things are materially better," said Larry Palmer, managing director of private wealth management for Morgan Stanley. "There's cautious optimism, but there's also cautious skepticism."
tiffany.hsu@latimes.com
Retail sales pick up in January after lackluster holidays
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Retail sales pick up in January after lackluster holidays
