J.C Penney, Dayton Hudson Report Disappointing Holiday Sales Figures

There was more Grinch than glory at some of the nation’s largest stores this Christmas.

Shoppers watched their wallets at J.C. Penney and Dayton Hudson Corp., which reported disappointing holiday sales.

“After Thanksgiving, everyone was jumping through hoops about this Christmas,” said Robert F. Buchanan, a retail analyst at NatWest Securities. “But that was a lot of baloney and we saw a slowing of consumer spending.”

The companies’ stocks fell Thursday on the New York Stock Exchange. J.C. Penney was down 87.5 cents to close at $47.875 and Dayton Hudson fell $1 to close at $38.25. Both trade on the New York Stock Exchange.

Store owners had been upbeat about this Christmas after suffering through a dismal season a year ago. Many thought a rebounding economy and high levels of consumer confidence would ignite lots of buying this year.

Despite reports of brisk buying the first weeks of the season, many retailers failed to keep up that pace through Christmas. Steep levels of credit card debt, foul weather and five fewer shopping days between Thanksgiving and Christmas contributed to the slowdown.

While most retailers won’t report their December sales until Jan. 9, Thursday’s reports suggested the season will fall short of expectations with only slight sales gains from a year ago.

“It wasn’t a great Christmas,” said Joseph Ronning, a retail analyst at Brown Bros. Harriman. “You have different kinds of retailers reporting disappointing numbers and that makes it hard to categorize where the strength was or could be.”

J.C. Penney, which had strong sales for much of the fall, said comparable store sales for the four weeks ended Dec. 28 rose just 6.2% from a year ago, and sales for the combined November and December climbed just 4.5%.

Sales from stores open at least a year, known as same-store sales, are considered the most accurate measure of a retailer’s strength. They exclude sales from stores that have been closed and from new stores, which often have disproportionately strong sales.

The Plano, Texas-based retailer also said its earnings for the fourth quarter would be in the range of $1.15 to $1.25 per share, well below Wall Street estimates of $1.59 a share. In addition, J.C. Penney will take an after-tax charge of approximately $175 million to $200 million for its recent acquisition of the Eckerd drugstore chain.

Comparable stores sales at Dayton Hudson increased 4.2% from a year ago, with its Target discount chain increasing 7.1%, Mervyn’s stores gaining 4.1% and department stores rising just 0.3%.

Last week, Nordstrom reported it will miss Wall Street’s fourth-quarter earnings projections because of weak holiday sales.