Federated Department Stores Inc. on Wednesday reported December sales at the lower end of its recently reduced forecast, a day before other major retailers are expected to announce weak sales for the month.
Federated, whose chains include Macy's and Bloomingdale's, said sales at its stores open at least a year rose 1.2% in December. Last week, it had warned that same-store sales would be up between 1% and 2%, versus its original forecast of 3%.
Same-store sales are a key measurement of a retailer's business because they exclude new and closed locations.
Overall, U.S. retailers are expected to report a gain of 2% to 2.5% in same-store sales for December, the smallest rise in five years, Bank of Toyko-Mitsubishi Ltd. said.
The forecast is almost half the 4% increase that Bank of Tokyo economist Michael Niemira estimated at the start of December. Although retailers slashed prices to attract customers, sales gains last week weren't strong enough to lift the month's sluggish results.
Most U.S. retailers will report December sales today.
In December 1999, retailers' sales rose 6.7%, for a combined gain of 5.4% in the November-December holiday season, Bank of Tokyo said. That was the best holiday sales performance in seven years. Niemira expects November-December sales this year to rise 3% to 3.25%.
Higher energy prices and falling stock markets have slowed consumer spending. Winter storms in many parts of the U.S. also hurt sales the last three weeks.
Federated said its December sales partly were hurt by consumer concerns of a slowing economy. But the company noted that it had to compete with stellar sales in the previous December, which saw a 6% jump in same-store sales.
Federated shares closed up $3.31 at $37.69 on the New York Stock Exchange.