Many top retailers reported strong January sales Thursday after offering merchandise and deals that drew in shoppers.
But shares of many retailers fell as investors worried that the sales owed too much to margin-sapping discounts, and that the tax hit of higher payroll taxes would hurt spending in coming months.
Macy's Inc., whose shares rose 2 percent Thursday to $40.27, was an exception. Its sales at stores open at least a year jumped 11.7 percent, in part because it got new merchandise into stores quickly. The results easily beat Wall Street forecasts, and the department store chain raised its profit forecast.
Kohl's Corp. reported a 13.3 percent jump, but that gain came in large part from clearing out merchandise at a discount before spring. The department store operator left its profit outlook unchanged, and its shares fell almost 1 percent to $45.81.
Overall, same-store sales rose 5 percent in January across 20 retailers, according to Thomson Reuters I/B/E/S. That was above both analysts' estimates of a 3.1 percent increase and the year-earlier 2.8 percent gain.
"January sales don't give you much of a sense what's coming," said Dan Hess, chief executive of Merchant Forecast, which provides financial research on the retail sector. "How much of it was clearance, how much of it was new merchandise?"
Low-priced retailers TJX Companies Inc. and Ross Stores Inc., and teen chain Zumiez Inc., raised outlooks. Department store operator Stage Stores Inc. said it would hit or beat the high end of its earlier estimate.
Gap Inc.'s sales came in slightly above forecasts, as its affordable Old Navy chain offered clothing that was a hit with shoppers. But analysts at broker Janney Capital Markets said investors would view Gap's modest profit estimate for the fourth quarter ended on Feb. 2 as "not good enough." Gap's shares were down nearly 1 percent to $32.23.
Analysts said January got a boost with unusually cold weather mid-month in big parts of the country that helped clear out winter merchandise, and a long weekend before New Year's Day helped. January is also a low-volume month, so numbers are less important than those for November and December.
The International Council of Shopping Centers said it expects February same-store sales to rise 2.8 percent to 3 percent.