Data, Perception and Understanding

“Monthly retail sales have long been an important tool for gauging the health of the American economy as well as the retailers themselves.

“But tomorrow, when retailers around the country report their February sales for stores open at least a year, the statistics will be a lot less meaningful. Macy's Inc., the nation's largest traditional department-store operator by revenue, will stop making its monthly disclosure, joining other retail titans such as Sears Holdings Corp., Home Depot Inc. and Dollar General Corp. …

“Two other retailers, Jos. A. Bank Clothiers Inc. and CVS Caremark Corp., abandoned reporting monthly sales as of January.

“‘There's obviously a common theme among all of these retailers,’ says Ken Perkins, president of Retail Metrics Inc., a research-consulting firm. ‘This is a trend when things get lean and difficult.’ …

“‘Giving less information at a time of high investor concern heightens the perception that there might be bad results,’ says David Dreman, chairman and chief investment manager of Dreman Value Management…

“At Macy's, informal discussions for months focused on the benefits of abandoning monthly disclosure of same-store sales... Executives at the Cincinnati-based company began debating that the obligation to report monthly same-store sales was a big distraction...

“Macy's spokesman Jim Sluzewski notes that companies in other industries -- like Motorola or Dell -- don't report sales monthly.

“‘The practice of reporting sales monthly unfortunately has encouraged a short-term orientation that distracts retailers such as Macy's,’ adds Mr. Sluzewski…

“‘Increasingly the thought is that reporting monthly sales results makes retailers susceptible to managing on a month-to-month basis,’ says Frank Badillo, senior retail economist at Retail Forward...

“But critics of retailers that abandon monthly sales reports note that, in good times, chains go out of their way to trumpet big gains in monthly sales. ‘It always seems to be the companies that are having problems’ that go mum, says George Whalin, president of Retail Management Consultants... He complained to both Home Depot and Sears about their lack of disclosure, saying he tracks the numbers closely. He says he got no response.”

(“Macy's Joins Trend Of Retailers Ending Monthly Reports.” Vanessa O'Connell. Wall Street Journal: March 6, 2008. pg. B.1)

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