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U.S. retailers report strong gains for September, aided by falling gas prices

U.S. retailers report strong gains for September, aided by falling gas prices

American shoppers encouraged by cooler temperatures and falling gas prices went on a clothes shopping spree in September, giving many retailers better-than-expected gains and lifting the industry's spirits two months before the holiday season. A notable exception was Wal-Mart Stores Inc.
As retailers reported their results Thursday, the winners crossed many categories, with department stores and teen merchants including Bebe Stores Inc., J.C. Penney Co. Inc. and Saks Inc. among the leaders.
The laggards again included Gap Inc. and Pier 1 Imports Inc., whose sales continue to languish.
Nonetheless, "this is a really strong month," said Ken Perkins, president of RetailMetrics LLC, a research firm in Swampscott, Mass. "The back-to-school momentum was strong, weather was really favorable and the big plummet in gasoline prices certainly put more disposable money into consumers' wallets."
Of the first 44 retailers to report September results, 32 topped analysts' expectations and 12 fell short, according to Thomson Financial.
The news was encouraging because analysts had braced for a consumer spending slowdown in the second half of the year as the economy cooled. But the deteriorating housing market remains a big concern. In the last few years, a booming home sales and record-low interest rates spurred spending as consumers taped into their rising home equity.
Meanwhile, although the Conference Board last week reported a rebound in consumer confidence in September, the survey showed lingering concerns about the job market. Employment showed modest gains in August, with wages barely up, and analysts are forecasting only a modest increase of 120,000 jobs for September. The Labor Department reports that figure Friday.
Still, declining gasoline prices, which have fallen 50 cents a gallon (13 cents a liter) in recent weeks, should help ease concerns about the job market. Economists had worried that rising energy costs would derail the labor market as companies look to cut costs by laying off workers.
In a positive sign, the Labor Department reported Thursday that the number of newly laid off workers filing claims for unemployment benefits fell last week to the lowest level in 10 weeks. The government reported that 302,000 people filed claims last week, the smallest number since the week ending July 22.
Wal-Mart, the world's largest retailer, which has blamed soaring gas prices for slowing sales, didn't benefit from lower prices at the pump last month. It said its same-store sales, those from stores open at least a year, rose 1.3 percent, well short of the 2.1 percent expected by analysts surveyed by Thomson Financial. The company said its sales, which were measured against September 2005 figures, paled in comparison because the year-earlier results were bloated by a rush of pre- and post-hurricane shopping.
Wal-Mart had lowered its own same-store projection to 1.3 percent from 1.8 percent, saying it had miscalculated its sales figures. Same-store sales are considered the best indicator of a retailer's health
For those merchants like BJ's Wholesale Club Inc., which sell gasoline, lower gas prices depressed business. BJ's reported a 0.9 percent decline in same-stores in September, below the 2.3 percent gain analysts forecast.
Meanwhile, discounter Target Corp. posted a 6.7 percent gain in same-store sales. The results beat the 5 percent analyst estimate. Target also raised its third-quarter outlook.
"Our sales in September were well above our expectations, driven in part by favorable weather," Bob Ulrich, chairman and CEO of Target, said in a statement.
Department stores, whose business has been rebounding in recent months, did particularly well in September, helped by strong fashion and cooler temperatures.
Nordstrom reported a 13.4 percent gain in same-store sales, beating the 3.8 percent Wall Street projection.
Saks, which operates upscale Saks Fifth Avenue, reported a 10 percent increase in same-store sales, better than the 3.8 percent estimate.
Penney, which stumbled in August, rebounded in September with a 10.2 percent gain in same-store sales, better than the 5.2 percent estimate. The retailer reported strong sales across all apparel and accessory categories.
Federated, which acquired May Department Stores Co. last year, had a same-store sales gain of 6.2 percent, above the 5.5 percent estimate. Same-store sales include only Macy's and Bloomingdale's.
In a statement released Thursday, Terry J. Lundgren, Federated's chairman, said customers have responded positively to the conversion of most of the former May Co. stores to the Macy's brand in September.
Federated Department Stores Inc. also raised its third-quarter and annual profit outlook, based on a strong month.
Limited Brands Inc.'s same-store sales jumped 12 percent, much better than the 7.7 percent Wall Street anticipated. And Bebe reported a 15.3 percent same-store gain, topping the 10.7 percent expected by analysts, while the Children's Place's same-store sales gain soared 20 percent, exceeding the 14.6 percent estimate from Wall Street.
Gap, which is making over its fashion assortment, had a 3 percent decline in same-store sales, though better than the 3.6 percent decline that Wall Street projected.
On Wednesday, Hot Topic, Inc. reported a 7.3 percent decline in same-store sales, worse than the 5.6 drop analysts projected, and American Eagle Outfitters Inc. reported a 19 percent gain in same-store sales, better than the 11.3 percent increase. On Tuesday, Kohl's Corp. reported a robust 16.3 percent gain in same-store sales, exceeding the 8 percent estimate.