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CE Dampens Dec. Sales For Discounters

1/05/2012 10:16:24 AM Eastern
New York - CE was a drag on December sales for Target and Costco.

Target said softness in CE and its music, movies and books category led to a disappointing 2.6 percent increase in sales for the five weeks, ended Jan. 1, to $10.1 billion, and a slim 1.6 percent gain in comp-store sales.

"December sales were below our expectations as growth in grocery and beauty offset softness in electronics and music, movies and books," said chairman, president and chief executive Gregg Steinhafel. Sales and traffic were strongest in the week leading up to Christmas, he said, as customers waited to shop for last-minute gifts.

The weaker-than-expected performance prompted Target to lower its fourth-quarter earnings guidance.

CE was also a weak link at Costco, where comp sales for its combined CE and appliance business fell in the high-single-digit range.

Net December sales for the No. 1 wholesale club rose 9 percent to $10 billion for the five weeks, ended Jan. 1, while U.S. comps increased 6 percent excluding gasoline.

Broken out by product category, TV dollar volume experienced double-digit declines, along with decreases in computer and camera comps. Conversely, Costco reported increases in audio, tablets and appliances.

Best Buy is scheduled to report its December sales results tomorrow.
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