Lehman: Tough Holidays Ahead

NEW YORK CITY-Retail sales this holiday season could fall below the industry’s 16-year average of a 4.9% increase, predicted Lehman Brothers analysts during a conference call yesterday. The company is forecasting a 3.5% to 4.5% year-over-year gain from the same period in 2004. Last year, Lehman tallied a 5.7% increase.

“It’s going to be a ho-hum holiday season,” said Alan Rifkin, Lehman Brothers’ retail hardlines analyst. High gas prices, energy costs, strong promotional pricing and other factors will hurt chain stores’ performance, he said.

But the analysts did not only focus on bad news. The retail industry has a few areas going for it right now during the holidays, such as an extra selling day (30 versus 29) compared to last year, better macro-economic conditions and a resilient housing market.