January Retail Numbers Expected To Be Soft

It seemed like, even in the depths of the holiday shopping season, retailers were still dreading the release of dismal monthly sales numbers. Unfortunately, it looks like that trend will continue into 2016.

24/7 Wall St. published a roundup of earnings reports from several retail brands, and the writing on the wall doesn’t tell a particularly happy tale — Q4 earnings across the board fell 1.4 percent. While brands might have taken some serious hits from warm temperatures depressing sales of cold weather products, those effects are now coming to bear as clearance sales and other discounts hit retailers’ books in January. The final month of the quarter and fiscal year for many brands did not bring the good news they were hoping for.

In detail, the financial damage was fast and furious. 24/7 Wall St. reported that Rite Aid saw its sales fall by 1.4 percent. Gap Stores suffered a 4 percent falloff. The news wasn’t categorically depressing, however; in fact, Costco is expected to post a 0.7 percent quarterly rise in earnings. But even that number pales in comparison to the 5 percent growth mark Costco posted in Jan. 2015.

While there’s only so much that retailers can do on their ends to boost sales and drive more customers into their stores, The Wall Street Journal wondered if this isn’t a place where executive management shouldn’t be expected to step in and manage market expectations for the good of the company. For example, while executives at Express made earnings predictions that tallied higher than the wider market’s consensus 62 percent of the time, the company only posted higher numbers on 48 percent of occasions. On the other hand, Michael Kors’ exec board posted lower predictions that bested the market consensus about half the time, but its earnings beat both internal guidance (93 percent of the time) and market estimates (87 percent of the time) at a reliable clip.

So, if higher sales are out of the question, better spin most certainly isn’t.