Holiday shopping drove Wal-Mart Stores (WMT) Inc.'s December sales increase, analysts said Tuesday, but noted it's likely clothing sales are still lagging from November.
Wal-Mart on Saturday said same-store sales rose 1.6 percent between Nov. 25 and Dec. 29, beating the company's forecast for flat to 1 percent growth. Same-store sales, or sales at stores open at least a year, are considered a key measure of a retailer's health.
The better-than-expected performance follows a November period that marked the company's first sales decline in a decade. That month's 0.1 percent fall was attributed to slow clothing sales.
Citigroup analyst Deborah Weinswig told investors Monday the company's focus on holiday items like consumer electronics and toys helped boost December sales.
"However, apparel likely remained disappointing, as warm weather exacerbated weak sales trends in the category," she added, noting that Wal-Mart also believes wet weather kept shoppers indoors in some regions.
"Persistent warm temperatures and procrastination by shoppers likely contributed to a last-minute surge in sales just before Christmas," wrote Weinswig, who maintained a "Buy" rating and $60 target price on shares.
Christmas fell on a Monday in 2006, which gave last-minute shoppers two full days to finish getting everything on their lists before the big day.
Bear Stearns analyst Christine Augustine said in a client note Wal-Mart customers likely spent more on each trip to the store during the December period, which helped drive results.
Wal-Mart on Thursday is expected to issue a detailed December-period sales report.