Retailers struggle before holiday season
Many retailers reported disappointing sales in September as warm weather and uncertainty about the economy deterred consumers. The poor results have caused several companies to cut their earnings forecasts just before the holidays, the Associated Press reported.
Though Wal-Mart Stores Inc. reported a 1.5 percent gain in same-store sales, Macy’s Inc. suffered a 2.7 percent drop, J.C. Penney Co. Inc.’s same-store sales fell 4.6 percent and Gap Inc. and Mothers Work Inc. each reported a 7 percent decline.
Target Corp.’s sales in stores open at least a year increased 1.2 percent, less than the 2.2 percent anticipated by analysts, dragged down by weak apparel sales. The company projected that its full-year earnings will be below $3.60 per share, after earlier saying that it expected to earn “slightly more or slightly less” than that. Penney’s lowered its forecast to $1 to $1.04 per share, compared with its previous guidance of $1.28. Limited Brands Inc., which had a 4 percent drop in sales, lowered its third-quarter earnings guidance, predicting that it might not make a profit.
Slow sales may cause retailers to cut prices to get rid of inventory before holiday merchandise arrives. Retailers have been struggling with a slowdown in sales for most of the year as shoppers have been paying more for food and gasoline and contending with a weak housing market.