Foul Market, Weak Economy Get Consumers To Slow Spending

The Christmas shopping season rarely fulfils the hopes and dreams of retailers around the country, but this year looks to be especially glum. We’re getting a sample of what’s to come this week as a number of retailers come out with monthly reports. They’re not only bad, but worse than expectations. Take Gap Inc.:

“Gap Inc. today reported net sales of $1.34 billion for the five-week period ended October 4, 2008, which is a decrease of 6 per cent as compared with net sales of $1.43 billion for the same period ended October 6, 2007. The company’s comparable store sales for September 2008 decreased 11 per cent compared with a 7 per cent decrease for September 2007.”

Abercrombie & Fitch looks just awful:

Abercrombie & Fitch today reported net sales of $275.4 million for the five-week period ended October 4, 2008, a 7% decrease from net sales of $297.4 million for the five-week period ended October 6, 2007. September comparable store sales decreased 14%. Total Company direct-to-consumer net sales decreased 5% to $20.9 million for the five-week period ended October 4, 2008, compared to the five-week period ended October 6, 2007.

TJX meanwhile lowered guidance:

The Company is lowering its guidance for third quarter earnings per share from continuing operations to the range of $.55 to $.58 primarily to reflect lower-than-expected sales. This range is based upon estimated consolidated comparable store sales growth for the quarter of approximately flat to 1%.

Still, not everyone is toast. Wal-Mart is holding up, and Costco reported nice gains yesterday (though we don’t necessarily think of Costco when we think of Christmas shopping). And if we step away from a business perspective, this is all good news for people that have either a) been scolding Americans to spend less and b) wishing the holidays weren’t so commercialized. Thank you, Mr. Market.

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