Discounts Help Boost May Comp Sales Ahead of Estimates
New York—May comparable store sales beat estimates as consumers shopped for their mothers and took advantage of a plethora of promotions.
While most of the major retailers that still report monthly sales were modest, totals exceeded estimates. The improvement in business and weather conditions in the second half of April continued into May.
Overall, the eight retailers tracked by Thomson Reuters reported a 4.6% increase in May sales, excluding newly opened and closed stores. Thomson Reuters had projected 3.6% growth versus a 5% increase a year earlier.
At Retail Metrics, a retail research firm, comp sales were said to be up 4.5% for the month, according to Ken Perkins, president of Retail Metrics. Fueled by a strong beat from Costco Wholesale, the showing was ahead of analysts’ forecasts for a 3.4% gain.
“The results were decent and reflective of better weather conditions that got consumers out,” said Perkins. “Retailers made it worth their while with relatively deep promotions.”
Stores, particularly in apparel offered some very sweet deals during the month such as 30% to 35% off everything in the store, Perkins noted.
While retailers received a nice lift from strong Mother’s Day and Memorial Day weekend business, improvements in the economy also helped during the month.
“Consumer confidence was up a little bit and the labor market has been better the last three months,” said Perkins. “So are feeling a little better about their overall situations. But retailers still have a tough road ahead as they face intense price competition from all of their brick-and mortar competitors as well as from online players like eBay and Amazon. And a vast majority of consumers are still not seeing wage gains.”
“It’s not just warm weather,” said Michael Niemira, chief economist at the International Council of Shopping Centers. “In comparison, temperatures were nearly identical to last year. Presumably the change is more fundamental.”
Most retailers, including major such as Walmart, JCPenney, Macy’s Inc., Kohl’s, Ann Inc. etc., stopped reporting monthly sales data some time ago, making it difficult to get a snapshot of the entire industry.
Below are results from retailers who still report. Gap Inc. is scheduled to release its May sales later today and is expecting a 3.9% comp store increase.
●L Brands Inc. said its comp store sales for May rose 3% compared with last year, ahead of analysts’ estimate for a 2.1% rise. Net sales rose 4% to $763.6 million in May.
“L Brands has now exceeded expectations every month this year,” said Perkins. “Robust Mother’s Day and Memorial Day weekend business aided by a heavy dose of promotional activity on the part of most retailers provided shoppers with enticing deals.”
Victoria’s Secret, normally the top performer, in May was surpassed in comparable store sales by Bath & Body Works. Victoria’s Secret reported a 2% comparable store sales increase, mostly driven by sales of lingerie and Pink brand merchandise. Wall Street analysts had expected a 2.3% increase.
Sales at Victoria’s Secret Direct, which is mainly online and catalog sales, fell 10%.
Bath & Body Works reported comparable store sales increased by 5%.
●The Buckle Inc. reported comp store sales for May fell 3.1% compared with the same period a year ago. That was worse than the 0.3% rise analysts expected. Total net sales
Net sales declined 1.2% to $72 million for the month.
●Zumiez Inc. posted a comparable store sales increase of 3.6% for May compared with a 0.5% increase analysts expected. Total sales for the month were $49.5 million, up 13.3% over May 2013.
●Cato Corp. reported sales of $86.4 million, a 6% increase versus sales of $81.7 million a year ago. Comp store for the month increased 3%.
“May sales continued our recent trend,” said John Cato, chairman/president/ceo. “However, we continue to expect the remainder of the year will be in line with our original guidance.”
●Stein Mart Inc. reported total sales for May $109.6 million, a 2.2% increase. Comparable store sales increased 0.4%.
●Costco‘s comp store sales rose 6% in May, topping analysts estimate for a 4.8% rise.
Costco said Thursday that the figure also increased 6% in the U.S. Internationally, the metric was up 4%.
Excluding higher gas prices and the fluctuation of foreign currency exchange rates, comp sales were up 7% abroad.
Total revenue rose 8% to $8.78 billion.