Retailers Raise Forecasts on Surge in Holiday Sales

J.C. Penney Co. and Macy’s parent Federated Department Stores Inc. raised their December same-store sales forecasts, encouraged by a last-minute holiday rush and crowds of post-Christmas bargain hunters.

Wal-Mart Stores Inc. and Sears, Roebuck & Co. left their estimates unchanged, while Kmart Corp. said sales will decline instead of rise as much as 2%, as previously forecast.

Retailers--who had slashed prices by as much as 75%--expected a sales surge just before Christmas. On Dec. 19, almost two-thirds of consumers hadn’t finished buying gifts, and 15% hadn’t even begun, according to the International Mass Retail Assn. The 11th-hour sales pickup won’t rescue the industry from its most disappointing holiday season in at least 16 years, analysts said.

Federated said it now forecasts a decline of 9% to 9.5%, compared with initial expectations for an 11% to 14% drop. The company, which also owns Bloomingdale’s, Rich’s, Lazarus and Burdines, is working against a 1.2% gain last December. Federated shares rose 39 cents to $40.90 on the New York Stock Exchange.

J.C. Penney said December sales at department stores open at least a year will rise 5% from December 2000, better than the previous forecast of 3% to 4%. J.C. Penney shares rose 5 cents to $26.90 on the NYSE.

Federated and other apparel merchants braced for a bleak holiday because of the recession and shoppers’ lukewarm response to winter fashions, analysts said.

Bank of Tokyo-Mitsubishi Ltd. expected industry same-store sales this month to rise 1% from December 2000. For the combined November-December period, the bank forecast a 1.5% gain, which would be the smallest holiday increase since at least 1986. Same-store data are considered key because they exclude sales at stores that opened or closed in the last year.

Wal-Mart, the largest retailer, said it expects sales growth at the high end of a 4% to 6% range. On the NYSE, shares of Wal-Mart fell 80 cents to $57.55.

Sears, which said sales are headed for a percentage decline in the low- to mid-single digits, fell 36 cents to $47.64. Kmart rose 8 cents to $5.46. Both trade on the NYSE.

Most major chains will report December results on Jan. 10.