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Retailers not celebrating
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January 2, 1997: 9:35 p.m. ET
J.C. Penney, Dayton Hudson and others report mixed holiday sales
From Correspondent Rhonda Schaffler
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NEW YORK (CNNfn) - J.C. Penney & Co., Dayton Hudson Corp. and other retail chains issued preliminary holiday-sales figures Thursday that rang up short of analyst expectations.
"We've gone from a situation where retailers were wildly excited about the prospects for 1996 to one where reality has set in," said Bob Buchanan, retail analyst for NatWest Securities.
"It looks like in some cases, there's going to be some disappointing results coming out," Buchanan said.
J.C. Penney reported that same-store sales for the four weeks ended Dec. 28, excluding drug stores, increased 6.2 percent from 1995 levels.
The company did not release dollar figures for same-store sales, which cover stores open at least a year.
However, Penney's said it did not expect fourth-quarter earnings before charges to meet Wall Street expectations. The chain added that November and December profit margins fell below planned levels.
Dayton Hudson, which operates such chains as Target and Mervyn's, said its same-store sales rose 4.2 percent during the four-week holiday period. Like Penney's, Dayton Hudson did not release dollar figures.
Company Chairman Bob Ulrich said that while Target and Mervyn's results met projected levels, sales at Dayton Hudson's department-store division "were below our expectations."
Carson Pirie said same-store sales rose 7.8 percent.
It, too, declined to release hard dollar figures, although company Chairman Stanton Bluestone said results fell in line with his personal expectations.
However, Carson Pirie added that it expected five-week figures for all of December to fall below those of the same 1995 period.
Other major chains like Wal Mart have yet to report holiday sales.
Thursday's mixed figures hurt stocks not only of those companies that reported sales, but also of retailers like Sears and Circuit City.
Many chains went into the holiday shopping season with high hopes.
But retailers suffered from the fact that Thanksgiving fell late this year, making the traditional holiday shopping season five days shorten than in 1995.
Last-minute promotions mostly failed to attract shoppers.
Still, some analysts hope that even with soft sales, retailers' profits for the holidays will beat last year's results.
"There is not as much inventory this year than there was last year, and there were sales at higher margins than there were a year ago," said analyst Patrick McCormack of Dean Witter.
Analysts also remain confident that other chains like Sears, May Department Stores and Federated Department Stores will meet or exceed holiday-sales expectations.
Reuters news service contributed to this report.
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