NEW YORK - Consumers took a breather last month, holding back a bit after September's shopping spree and giving retailers a mixed sales performance. Still, the outlook remains upbeat for the holiday season.
As merchants reported their results Thursday, early winners included Limited Brands Inc. and Bebe Stores Inc. But there were also plenty of disappointments from a wide array of stores like Costco Wholesale Corp. and Pacific Sunwear of California Inc.
"There are some signs of strength in these reports, but clearly there were more companies missing expectations," said Ken Perkins, president of RetailMetrics LLC, a research firm in Swampscott, Mass, who said he was surprised by the results.
But Perkins added, "I am not sure if this says a lot about the consumer." He said he believes strong sales in September stole away some business from October and believes shoppers consumers should regain their stride for the holiday season.
According to Thomson Financial, based on 22 merchants that have reported so far, 12 retailers had results that missed expectation; 10 beat estimates.
Consumers have been resilient even when energy prices were soaring earlier in the year. The decline in gas prices, which began in late summer, have helped offset the overall slowing of the economy eased the financial pain among consumers.
But consumers' willingness to spend depends largely on their own personal job security. While the job market has been steady, recent monthly reports from the Labor Department have showed slower growth. And consumers' confidence, while still high, weakened in October, dragged down by shoppers' concerns about the job market, according to the Conference Board.
Employers added just 51,000 jobs in September, the fewest in almost a year. On Friday, analysts expect the government to report a gain of 125,000 jobs.
Another concern is the slowing housing market, but economists believe that such weakening should not have a big impact on spending until 2007.
Costco reported a 4 percent gain in same-store sales, or sales at stores open at least a year. Same-store sales are considered an important gauge of a retailer's health. Analysts polled by Thomson Financial expected a 4.6 percent gain.
Limited enjoyed a 9 percent gain in same-store sales, better than the 7.2 percent gain that Wall Street expected.
Teen retailers had a mixed performance.
Pacific Sunwear posted a 7.1 percent drop in same-store sales, worse than the 5.4 percent decline Wall Street expected. But Bebe had an 8.2 percent gain in same-store sales, in line with the 8.3 percent estimate.
On Wednesday, American Eagle Outfitters Inc. reported a same-store sales increase of 8 percent. The teen retailer said that the holiday collection, which arrived in the last week of the month, has met with positive consumer response.
But Hot Topic Inc., struggled with a 7.2 percent decline in same-store sales for the month, worse than the 5.7 percent decline Wall Street expected.