Jewelry web blog

Shoppers opened up their wallets wider than expected in December and celebrated the season with gifts after all.

It translated into a decent Christmas for most retailers that restrained orders and kept a lid on expenses, learning lessons from an awful 2008.

Several companies raised fourth-quarter profit outlooks Thursday, including Pier 1 tiffany jewelry sale, Fossil Inc., Macy’s, Nordstrom, Victoria’s Secret parent Limited Brands, TJ Maxx and Marshalls’ parent TJX, and Aeropostale.

Three out of four chains reported better-than-expected December sales. Overall, U.S. chain stores sales rose 2.8 percent from a year ago, based on an index compiled by the International Council of Shopping Centers.

It was the strongest showing for the group of 30 major chains in the index since April 2008. Results don’t include the world’s largest retailer, Wal-Mart Stores Inc., which no longer reports monthly sales. It accounts for 10 percent of U.S. sales and helped drive this year’s promotions on toys, consumer electronics, DVDs, books and small appliances.

Unlike most holiday seasons, both the consumer and the retailer “won,” said Eric Beder, retail analyst at Brean Murray Carret & Co.

“Last-minute and post-holiday shopping was materially better than expected,” he said. “There were more than enough planned and unplanned price cuts for shoppers to feel they received a solid bargain.”

And with lower inventories, retailers were generally able to achieve profit goals, he said.

Toys R Us Inc., Costco Wholesale Corp., Target Corp. and Kohl’s Corp. reported solid sales tiffany bracelets. Even Sears Holding, which operates Sears and Kmart stores, posted positive numbers.

The season began slowly, but spending finished stronger than expected, said Michael P. Niemira, chief economist and director of research for the International Council of Shopping Centers. Together, November and December were up 1.8 percent in the ICSC index, better than the 1 percent forecast.

Home merchandise and shoes were bright spots.

Fort Worth-based home decor chain Pier 1 kept its momentum going in December, reporting a better-than-expected 8.6 percent increase in same-store sales. Throughout the month, customer traffic and average transaction figures increased over last year, said Alex W. Smith, chief executive.

Before Thursday, analysts already had expected retail earnings to be up as much as 28 percent from a year ago as companies slashed inventories and expenses, said Retail Metrics analyst Ken Perkins. New estimates should be higher, but analysts remain cautious about what’s next.

“January inventories are low, which will limit clearance merchandise,” he said. “Outside of gift cards, there’s no real catalyst to shop, and consumers will likely take a breather.”

Dallas-based Neiman Marcus, Pier 1 and Richardson-based Fossil Inc. posted sales gains, but the trend didn’t hold for all locally based retail chains.

Irving-based Zale, Grapevine-based GameStop and Plano-based J.C. Penney continued to post lower sales than a year earlier.

Slow traffic drove Penney’s sales down 3.8 percent, said Liz Dunn of Thomas Weisel Partners, who lowered her fourth-quarter and year-end earnings estimates for Penney. Penney’s best week of the month was after Christmas, she said.

December’s decline was better than analysts surveyed by Thomson Reuters expected and the 8.1 percent drop Penney recorded in December 2008.

Penney’s Internet sales were a bright spot and increased 6.3 percent in December, spiking with increases in the high teens during Thanksgiving weekend and the week before Christmas, the company said.

Penney also narrowed its earnings guidance to below analyst forecasts.

Fossil raised its fourth-quarter sales and profit outlook because of stronger U.S. wholesale shipments and better-than-expected results at its namesake stores.

A stronger stock market and promotions likely lured customers of designer and luxury goods back in December. Neiman Marcus posted its first monthly sales increase since May 2008. Saks Inc. reported a better-than-expected December, too.

Saks said it shifted a promotional event from November to December. Both stores added merchandise in middle price ranges this Christmas. High-price categories were the strongest at Neiman Marcus. Women’s fine apparel, designer handbags and fine jewelry led store and Internet sales. Shoes and men’s clothing also did better in stores.

High-price jewelry did well, analysts said, but the middle-income household still held back on luxury purchases.

Zale Corp. reported a 9.2 percent decline in December same-store sales as the mall-based tiffany on sale lost more market share during its most important selling season. Zale said it “maintained pricing and promotional discipline” at levels that lessened the impact of lower sales on its profitability.

Zale appears to be falling behind its peer group. It reported an 18.6 percent drop in November sales.

Overall, the jewelry category posted its fourth consecutive monthly gain, increasing 6.9 percent from December 2008, according to MasterCard SpendingPulse.

High-end and lower-end jewelry sales stayed strong in December, while the midtier, mall-based retailers struggled, said Michael McNamara, vice president for SpendingPulse, a measure of consumer payments by credit, cash and check.