NEW YORK - Several major retailers slashed their fiscal fourth-quarter profit forecasts this week in the latest sign that Americans didn't spend briskly during the holiday shopping season.
American Eagle Outfitters and Bed Bath
& Beyond are among seven retail chains so far that have cut their
expectations for their fiscal fourth quarter, which includes the critical
holiday shopping season when stores can make up to 40 percent of their annual
The holiday season was challenging for
stores as many Americans still were contending with the effects of a shaky
economic recovery. Weather was also an issue, as snowstorms across the country
kept some shoppers home. And the season was six days shorter, which meant less
time for people to shop.
Retailers discounted early and often
to get shoppers into stores. In fact, it was common to see sales of 50 percent
off a store's entire stock of clothes during the final days of the season. It
appears that the discounts got people to spend -- sales for November and
December rose a better-than-expected 2.7 percent to $265.9 billion, according to
data tracker ShopperTrak. But the deep price cuts ate away at retailers'
As a result, Bed Bath & Beyond
Inc., a New Jersey company, on Wednesday lowered its earnings forecast for the
fiscal fourth quarter and full year that ends early this year after its
third-quarter results missed analysts' expectations.
Pier 1 Imports Inc., a Texas-based
chain that sells home decor, on Thursday also downgraded its earnings forecast
for the fiscal fourth quarter and the full year, citing a disappointing December.
And teen retailer American Eagle
Outfitters Inc. on Thursday reported that sales at stores open at least a year
fell 7 percent in the nine weeks that ended on Jan. 4 when compared with the
same period a year ago.
After a "solid" Thanksgiving
weekend in late November, sales through Christmas slowed down as other
retailers offered more promotions, American Eagle CEO Robert Han said. As a
result, the chain reduced its fourth-quarter expectations to the low end of its
All told, Ken Perkins, president of
RetailMetrics LLC., a research firm, said that fourth-quarter earnings growth
for the 120 stores he tracks are expected to be up 1.2 percent, the weakest
performance since the 6.7 percent drop seen in the second quarter of 2009 when
the economy was just coming out of the recession
"This was a holiday season that
most stores would like to forget," he said.