Retail Sales Warm Up, but Holiday Forecast Still Hazy

Halloween brought some business to sales-starved retailers, but it left them still guessing about the Christmas shopping season.

Merchants who reported their October sales figures Thursday said they had respectable gains because of Halloween and the arrival--finally--of cooler weather.

But analysts warned there are no guarantees of how holiday sales will go. Despite high levels of consumer confidence and low unemployment levels, consumers haven’t been spending freely for much of this year.

“Consumers are still very cautious,” said Kurt Barnard, a retail consultant and president of Barnard’s Retail Trend Report. “Just because they went shopping at the end of October doesn’t mean Christmas will be good.”

Sales slumped in September as higher-than-normal temperatures around the country stifled sales of everything from cashmere sweaters to wool slacks.

Similar weather conditions continued into October, again depressing sales.

But the cool weather finally arrived by mid-October, luring shoppers into the nation’s stores and malls in search of merchandise to keep them warm.

“The fall came in the last 10 days of last month, and consumers shopped with quite a vengeance,” said Thomas Tashjian, retail analyst at NationsBanc Montgomery Securities.

Discounters including Wal-Mart Stores Inc., Kmart Corp. and Dayton Hudson Corp., which owns the Target chain, did particularly well, benefiting from their wide assortment of Halloween costumes, apparel, candy and decorations.

The outlook for Christmas remains grim for many specialty retailers. Ann Taylor, Talbots Inc. and Limited Inc. all reported dismal sales in October, leaving them with a glut of inventory to clear out before the holidays.

That means consumers are likely to find plenty of bargains.

Wal-Mart, the nation’s largest retailer, said sales from stores open at least a year, known as same-store sales, rose 6% from a year earlier, while total sales were up 14.5%.

Same-store sales are considered the most accurate measure of a retailer’s strength. They exclude revenue from stores that have been closed and from new stores, which often have disproportionately strong sales.

Sears, Roebuck & Co. said its same-store sales rose 1.2%, while total sales advanced 5%. Chairman Arthur Martinez said weak sales in its automotive division hurt overall sales.

Kmart said same-store sales increased 4.9% and that total sales rose 1.4%.

J.C. Penney Co. said its same-store sales rose 2.6% and that total sales were up 29.7%, including revenue from Eckerd drugstores, which it acquired last year.

Dayton Hudson said same-store sales increased 6.1% and that total sales rose 10%. The biggest gains came at its Target stores, but the results at its Mervyn’s clothing stores and department store chains were above expectations.

Federated Department Stores Inc. said its same-store sales rose 3% and that total sales gained 3.8%. May Department Stores Co. said its same-store sales rose 3% and that total sales were up 3.2%.

Limited said same-store sales fell 3% and that total sales rose 2%.

Ann Taylor said its same-store sales fell 13.6%, while total business fell 9.2%. Talbots said its same-store sales fell 3.6%, while total business was up 3%.