Sales predicted to increase
An improving economy and tax changes should help retail sales increase 3.8 percent to 4.4 percent this year, an industry trade group said Thursday.
The National Retail Federation’s forecast for 2018 comes after retailers saw the biggest sales increase since 2010 over the recent holiday period.
Low unemployment that means more competition for workers, as well as the tax changes, have led several companies to offer bonuses or raise wages. Retailers like Walmart, Best Buy and Lowe’s have done that so far, and more details about how retailers will use their tax savings may come as they report fourth-quarter results.
Retail sales grew 3.9 percent to $3.53 trillion in 2017 from the previous year, according to the U.S. Census bureau’s preliminary estimate. The number may still be revised but exceeded the group’s forecast for growth of 3.2 to 3.8 percent. The retail industry enjoyed a better-than-expected 5.5 percent increase for November and December alone.
L Brands beats expectations
L Brands had a roaring start to the year, reporting January numbers that were far better than Wall Street expectations.
The Columbus retailer reported that comparable-store sales, a key indicator of a retailer’s health, increased by 7 percent, well ahead of analyst predictions of a 1.8 percent rise. Overall sales for the five-week period rose to $1.04 billion, up from $805.2 million for the four-week period last year. January’s extra week this year represented about $150 million in sales.
The report was a surprise to analysts.
“L Brands turned in its strongest performance in 25 months dating back to December 2015,” said Ken Perkins, president of research firm Retail Metrics.
By brand, Victoria’s Secret reported comparable-store sales for the month rose by 4 percent, well ahead of the 1.9 increase expected by Wall Street. The lingerie brand saw growing sales in lingerie, the Pink chain and beauty items.
At Bath & Body Works, comparable-store sales increased by 13 percent, far better than the 1.3 percent rise expected. Sales were driven by the chain’s semi-annual sales.
Deal nets $12.6 million fine
Sunoco has agreed to a $12.6 million fine over problems with a massive natural gas pipeline project, but work will resume under a consent agreement, Pennsylvania regulators said Thursday.
The Department of Environmental Protection said Sunoco Pipeline has made changes since work on the $2.5 billion Mariner East 2 pipeline was halted Jan. 3.
The 350-mile project has been plagued by spills and leaks of drilling fluid and improper construction methods.
In stopping the work last month, the state agency said Sunoco demonstrated it could not or would not comply with Pennsylvania’s clean streams law and other regulations.
The company said Thursday it agreed to the deal to avoid litigation and resume construction on a major pipeline project.
Compiled from staff and wire reports.
Business news briefs, Feb. 9: Retail sales predicted to increase