Retailers Confirm Expectations of Dismal Sept. Sales

The first retailers reporting actual sales results for September are confirming what many sellers had feared: Sales were dismal. And some analysts said Tuesday that results may not improve any time soon.

Reporting in advance of regular monthly sales reports scheduled for Thursday, Toys R Us Inc. and Barnes & Noble Inc. said Tuesday that sales were worse than expected during September, mostly because of consumer response to the terrorist attacks on the East Coast.

Because of sales declines, Nordstrom Inc. and Toys R Us also said Tuesday that third-quarter profits will be lower than expected.

Industry-wide reports on Tuesday from several analysts also showed sharp sales declines and dramatically lower consumer traffic.

“I don’t think we’ll be terribly surprised by the industry average number on Thursday. I think it will be one of the weakest September reports in the last 30 years,” said Michael P. Niemira, an economist and retail analyst with Bank of Tokyo-Mitsubishi. “Everybody seems to be telling the same dismal story on outlook. With the exception of Wal-Mart, more have talked about weakness lingering through the Christmas season.”

Wal-Mart Stores Inc., along with other discount chains and warehouse clubs, has reported healthy sales as nervous consumers searched for value prices on basic and necessary goods.

Toys R Us said third-quarter losses would be more than double expectations because of slowing sales and increased spending on advertising, some of which had to be changed after the attacks. The company’s per-share loss will be about 22 cents, Toys R Us said, rather than the 10 cents it previously predicted, with about 9 cents of the difference attributable to the attacks.

Nordstrom said earnings would be 3 cents to 6 cents per share for the quarter, far below estimates of 17 cents to 20 cents. The Seattle-based seller reported a 9.4% sales decline in stores open at least a year; excluding a first-ever fall sale, the drop was 15.2%.

Barnes & Noble reported a sales decline of 1.1% for the month but estimated a gain in third-quarter same-store sales.

Analysts predicted poor showings by most other retailers, particularly department stores and specialty apparel sellers.

Lehman Bros. estimated sales declines of 15% to 20% at Federated Department Stores Inc. and May Department Stores Inc., with sales gains at Wal-Mart of 4% to 6% and Costco Wholesale Corp. of 2% to 3%.

Goldman Sachs estimated a slew of negative numbers in the specialty stores, putting sales declines at about 15% at Abercrombie & Fitch Inc. and about 17% at Gap Inc.

The Redbook Retail Sales Average, reported Tuesday by Reuters-owned Instinet Research, pegged the overall retail industry sales decline at 2.5% during the five weeks ended Oct. 6, compared with the month before. Redbook reported a year-over-year sales decline of 0.2% for the same period.

And although many retailers said sales improved as the month went on, Bank of Tokyo-Mitsubishi said last week’s sales were down 0.8% from the week before.

Mall traffic numbers also fell for the week, down 4.4% from the same period last year, according to market research firm RCT. The firm said Tuesday that for the month, retail traffic fell 6.8% as compared with a year ago.

More ominous for retailers are traffic reports from Sunday alone, when the United States began attacks on Afghanistan. Mall traffic on Oct. 7 fell more than 9% from the same day a year ago, according to Bank of Tokyo-Mitsubishi.

Toys R Us gained 28 cents on the New York Stock Exchange to close at $18.58. Barnes & Noble rose 34 cents to $36.25 and Nordstrom closed down 29 cents to $15.17, both also on the NYSE.