By Chelsey Dulaney 

A number of retailers on Thursday reported better-than-expected sales growth for the holiday season, easing some investor concerns about the year's most important selling period following the warning Wednesday from Macy's Inc.

The full picture of the holiday season remains uncertain, however, as many large retailers--such as Wal-Mart Stores Inc. Target Corp. and Amazon.com Inc.--haven't broken out their holiday sales.

What is emerging so far, however, is sales appeared to have held up better at retailers selling products immune to the unseasonably warm weather that hit much of the country last month, as well as those stores with a growing online presence. Standouts included L Brands Inc., Children's Place Inc. and Zumiez Inc.

Still, the retail industry's larger issues remain. Customer traffic fell at many stores and malls, as more sales moved online. Also, shoppers continued to search for discounts, forcing retailers to offer promotions and potentially face lower profits.

Overall, retail chains saw a 6.4% slide in traffic at physical stores during November and December, according to RetailNext, which collects data through analytics software it provides to retailers. Sales at stores slipped 2% for the period but was helped by strong performances in the last two weeks of the year.

Adding to the pressures this holiday season was unseasonably warm weather in many parts of the country. Macy's said 80% of its year-over-year sales decline was due to the warmer winter weather, which dampened sales of cold-weather gear like coats, sweaters and boots. In all, Macy's said sales at existing stores fell 4.7% in November and December.

Department store rival J.C. Penney said that while warmer weather significantly affected its apparel sales, the company's total core sales still rose 3.9% for the holiday period. Penney cited, in part, its efforts to improve online sales by offering things like in-store pickup, and the retailer said it saw record online sales this holiday season.

Meanwhile, sales at Children's Place rose a better-than-expected 7.3% in the first nine weeks of its fourth quarter, helped in part by the company's decision to cut back on its cold weather merchandise this year after a similarly warm start to winter last year, according to a research note from Stifel Nicolaus.

The holiday results prompted Children's Place to bolster its earnings guidance for the quarter, as did fellow retailers Cato Corp., Francesca's Holdings Corp. and Zumiez.

Zumiez, which sells action-sports equipment such as snowboarding and skateboarding gear, had lowered expectations Dec. 3, blaming fashion misses and the effect of sales promotions. Wednesday, the company said results weren't as bad as previously projected. Analysts, in part, credited improvements in Zumiez's digital strategy.

In all, industry tracker Retail Metrics said its index of retailers like L Brands and Buckle Inc. is showing a 0.9% increase in December sales, above expectations for a 0.5% increase.

That number notably doesn't include the results of Gap Inc., which is expected to report sales after the bell Thursday. Retail Metrics is forecasting a 3.9% slide in comparable sales for Gap, led by a 13.3% decline at Banana Republic.

Some retailers that don't rely on sales of winter apparel reported strong results. L Brands Inc., which owns Victoria's Secret and Bath & Body Works, said it saw its "best December ever" with an 8% increase in same-store sales. For Victoria's Secret, core online sales jumped 14%.

Signet Jewelers Ltd., the parent of brands like Kay and Zales, said its core sales rose 4.9% in the holiday season, as online sales rose 11%.

Costco Wholesale Corp., the world's second-largest retailer, reported a 1% sales increase in December, edging in narrowly above expectations despite a hit from lower gas prices and foreign exchange.

The positive tone to holiday sales Thursday boosted the stock prices of many retailers in midday trading, despite a larger market selloff. Among the bigger gainers, Zumiez rose 9.2%, Penney gained 2.9%, L Brands added 1.4%, and even Macy's traded higher, up 1.9%.

Overall, retailers made up more than half of the top 20 gainers Thursday in the S&P 500.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

 

(END) Dow Jones Newswires

January 07, 2016 14:48 ET (19:48 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
J C Penney (NYSE:JCP)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more J C Penney Charts.
J C Penney (NYSE:JCP)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more J C Penney Charts.