What Shutdown? October Retail Sales Beat Forecasts
NEW YORK (TheStreet) - Last month's two-week government shutdown didn't seem to deter consumers from shopping.
Though retail observers warned of a possible pullback, October sales grew compared to the same month in 2012, according to figures published by many of the country's largest retailer on Thursday.
Analysts were quick to point out that retailers used aggressive promotions to lure otherwise frugal shopper into their stories.
October same-store sales beat Wall Street expectations, registering 4.4% growth compared to an estimate of 3%, according to data compiled by Thomson Reuters. Sales in October 2012 grew 1.2%.
Excluding drug stores, October same-store sales were weaker with registered growth of 3.7% vs. a 2% estimate and 5.7% sales growth in the year-earlier period.
Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, says retailers aggressively promoted their merchandise to drive sales to offset the effects of the government shutdown on spending and leading up to what could be a weak holiday spending period.
"It's promotional madness in the mall in the lead up to the holiday season," Sozzi says. "All retailers chose to forego profit margins in order to drive sales in October, the greatest example being Limited Brands
Gap also pre-announced select third-quarter earnings metrics. Quarterly net sales rose 3% to $3.98 billion compared to last year, and comparable sales increased 1% compared to a 6% increase last year, the company said.
The company said it expects diluted earnings per share in the range of 70 cents to 71 cents for the quarter. Analysts on average expected third-quarter earnings of 66 cents a share, according to Thomson Reuters.
Earlier in the day, Costco Wholesale