New York—While Hurricane Irene may have dampened retail sales especially on the East Coast, the storm didn’t hinder sales at leading retailers. For August, Thomson Reuter’s tally of 23 retailers found a 4.4% increase in overall comparable store sales.
Some retailers reported that Irene had a negative effect on their sales figures, while others, such as Target and Costco, found that consumers flocked to stock up prior to the storm’s arrival, helping their figures. In aggregate, however, there’s only likely to have been a 0.1 to 0.2 percentage point of negative impact industry wide, said Ken Perkins of Retail Metrics.
Others reported a slower start to back to school sales. Even though the 4.4% showed there is some apparent consumer resilience in the fact of larger economic uncertainty, the increase fell short of analysts’ average estimate which expects a 4.6% increase, compared with a 3.2% gain in August 2010.
While mass merchant discounters fared best, posted a combined 7.8% increase, apparel specialty stores posted weak results, only a 1% gain, a figure dragged down, analysts said, by a dismal performance at Gap Inc.
JPMorgan analyst Brian Tunick argued to CNBC that there hasn’t been enough newness to attract teens into stores, so price off promotions are on the increase.
Back to School Turns Promotional?
“One thing that’s been interesting to us is that consumers are starting to take on more leverage in their revolving credit in the last three months, so we’ve seen the consumer start to reach a little deeper and take on more credit, so maybe that’s where more spending power is going to come in the back half of the year,” Tunick said
However, others see a positive impact from back to school. This year, back-to-school sales rose 3% over the same period last year, according to MasterCard Advisors SpendingPulse, which estimates for all forms of payment.
“It’s the best back-to-school season we’ve had since 2006,” said Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse. However, McNamara cautioned that results last year were soft and thus easy to beat.
“Although consumer confidence continues to be in the doldrums with regards to each component, the consumer is sucking it up and buying what needs to be bought for back to school,” said Wall Street Strategies analyst Brian Sozzi.
“Overall, back-to-school sales are strong,” Jennifer Davis, an analyst at Lazard Capital Markets in New York, said. “But it’s difficult for department stores to recover from that closure, especially during such a key shopping weekend.”’
The recession taught consumers how to juggle their spending in hard times,” added Candace Corlette, president of WSL Strategic Retail. “Shoppers have learned to be resilient. They have lowered their aspirations. The excess may be gone, but the fun and pleasure of shopping is still there. Retail sales are holding.”
Analysts maintain the still high unemployment rate and larger global economic concern are wild cards for consumer spending. And some retailers also said they don’t expect to fully recover lost Irene sales.
“In this environment, the mall has become highly promotional,” said Zumiez CEO Rick Brooks. “Who knows that we would get (lost Irene sales) all back, particularly again with the uncertainty around the economic environment.”
Below are reports from most major retailers who released August figures today. Note: Walmart, Hot Topic, Abercrombie & Fitch, Aeropostale, American Eagle Outfitters, American Apparel and Sears Holdings no longer release monthly sales reports.
●Macy’s Inc. reported August comparable store revenue rose 5%, beating analysts’ estimates of 4.5%. The department store retailer said that if it hadn’t had to close 100 of its 850 stores due to Hurricane Irene, the comparable store sales would have been a 6.5% increase.
Total revenue climbed 4.9% to $1.7 billion in August. The company, which operates Macy’s and Bloomingdale’s, said online sales grew by 35%.
For the year to date, Macy’s revenue totaled $13.544 billion, up 6.3% from $12.747 billion in the first 30 weeks of 2010. Macy’s year-to-date comparable stores sales were up 5.8%.
●JCPenney’s August comparable store sales edged downward 1.9%, hurt by Hurricane Irene and a later start to back-to-school shopping and missing analysts’ average estimated for a 0.8% increase. Total revenue dropped 4.5% to $ 1,439 billion.
The department store chain said today that while back-to-school shopping started later this year, sales picked up throughout the month. Strongest classifications were women’s accessories and men’s clothing. The southwest and southeast were August’s top performing regions.
●Kohl’s posted a 1.9% drop in its August comparable store sales due to lower customer traffic, missing analysts’ average expectation for a 1.6% decline. Total sales were flat at $1.41 billion.
Kohl’s reported that it would be aggressively increasing its market and “sharpening our pricing focus for the remainder of the fall season to reverse this trend.” So far this year, overall sales are up 2.9% and comparable store sales are up 1.1%.
●Dillard’s said its August total merchandise sales rose 3% to $441.7 million and comparable store sales rose 4%. The company reported sales were “slightly” above the average total company trend in its central region, “slightly” below trend in its western region and below trend in its eastern region.
Juniors’ and children’s apparel were “significantly” above trend.
●Saks Inc. posted comparable store sales rose 6.1% in August, led by strong sales of handbags, men’s clothing and footwear. Nonetheless, the increase missed analysts’ average expectation for a 7% comparable store increase. Total revenue climbed 5.5% to $168 million.
Best performing classifications included fashion jewelry, cosmetics, fragrances and accessories.
The company said Tropical Storm Irene hurt its same-store revenue results by about 150 basis points. For the year to date, comparable store sales rose 11.9%. Total revenue climbed 10% to $1.54 billion.
●Nordstrom reported a 6.7% growth in its August comparable store sales. Preliminary total retail sales grew 12.4% to $691 million from $615 million in the same period a year ago.
Year-to-date same-store sales increased 6.9% versus a year ago. Preliminary year-to-date total retail sales rose 12.2% to $5.64 billion from $5.02 billion a year earlier.
●Bon-Ton reported its August comparable store sales fell 4.7% as back to school business started off slower than last year. Total revenue dropped 5.4% to $177.1 million.
Strongest categories were cosmetics, sportswear, watches, footwear and intimate apparel.
“We were pleased with the favorable customer response to our expanded shoe assortments in 17 locations, which gives us confidence that shoes will be a key driver of fall sales. Our e-commerce business posted strong sales gains,” said Tony Buccina, vice chairman/president. “We begin September with inventories well positioned in support of merchandise initiatives we believe will drive top line sales in the second half… We believe there was a negative impact on our eastern stores from Hurricane Irene, however, it is difficult to quantify the lost sales caused by the disruption to our customers’ shopping patterns.”
●Stage Stores posted a 1.7% drop in August comparable store sales compared to a 0.5% increase in August 2010. Total sales were $113 million this year and $114 million last year.
The company noted that the Southeast and Southwest geographic regions saw comparable store sales gains, as did the children’s, cosmetics, home and gifts and junior merchandise categories. The company also announced completion of its 2011 rebranding program with twelve non-Goody’s stores rebranded as Goody’s in August.
●Target said total August sales were up 5.4% to nearly $5.3 billion. Comparable store sales increased 4.1% ahead of analysts’ average estimate of a 3.5% increase.
“August comparable store sales were in line with our expectations, reflecting solid results in our back-to-school and back-to-college categories,” said Gregg Steinhafel, chairman/ceo.”While the pace of the economic recovery is uneven and uncertain, we are confident in our ability to execute on our strategy to offer the right balance of convenience, newness and differentiation and to remain our guests’ preferred destination.”
Target said the average transaction size increased in August and that grocery sales increased in the mid- to upper-teens. The retailer said sales in it East Coast stores accelerated noticeably in late August as consumers stocked up on food and supplies ahead of the arrival of Hurricane Irene.
●Gap Inc. said its total comparable store sales fell 6% in August as all its divisions reported disappointing. Analysts’ average estimate expected a 3.8% decline.
Total revenue fell 3$ to $1.1 billion.
Comparable store sales declined the most at Gap North America, falling 8%. Banana Republic and Old Navy both fell 4%.
“As we said on our recent earnings call with investors, we’re determined to make the necessary adjustments to women’s product and marketing to improve our overall performance and drive top-line growth going forward,” said Glenn Murphy, chairman and chief executive officer
●Limited Brands, which owns Victoria’s Secret, Bath & Body Works, La Senza, and Henri Bendel, posted an 11% jump in its August comparable store sales, beating analysts’ average estimate for a 7.6% increase.
Net sales totaled $702.4 million, versus $630.3 million in the prior year period.
●Cato reported a 3% decline its August comparable store sales with net sales dropping 2% to $60.6 million.
The Charlotte, North Carolina-based company said that the results reflected cash-strapped customers, with Hurricane Irene having had a “minimal impact” on sales for the month.
● Destination Maternity said August comparable store sales fell a more-than-expected 5.7%, due in part to the maternity apparel retailer’s expansion of leased department locations at Macy’s Inc. Analysts’ average estimate expected a 1.8% decline.
The company, which owns the Motherhood Maternity and A Pea in the Pod brands, has been struggling with recent declines in comparable store sales, though its latest fiscal third-quarter earnings grew 9.2%.
The company estimates since its February leased-department expansion with Macy’s, comparable store sales have declined by 0.01% to 0.02%.
Total August sales rose 4.7% to $44.9 million from $42.9 million, reflecting increased sales from its relationship with Macy’s, online and international sales. Internet sales jumped 56.5%
●Wet Seal said August comparable store sales climbed 5.5 percent, beating analysts’ estimates for 4.2%. Net revenue climbed 10.3 percent to $58 million.
By division, Wet Seal posted a 7.3% increase in comparable store sales while, Arden B, posted an 8.7% decline.
The teen retailer also noted that its online sales fell 23%, as it tries to sell more of its clothing at full price online.
Susan McGalla, ceo, said the results were in line with the company’s expectations. Wet Seal stores were helped by strength in accessories sales, she said. Arden B grew dress sales but saw disappointing sales in sportswear and accessories. The company is planning new promotional sales strategies at Arden B after Labor Day.
●Buckle Inc. reported it comparable store sales rose 8.3% in August, nearly double the 4.5% growth analysts’ average estimate had predicted.
Total net sales for August rose 11.9% t to $95.3 million.
●Zumiez posted August total net sales up 10.9% to $65.9 million, compared to $59.4 million last year. Comparable stores sales increased 4.3% on top of a comparable store sales increase of 9.1% in the year ago period.
●Ross Stores said August comparable store sales grew 4% on top of a 5% increase last year. Total sales increased 8% to $659 million, up from $608 million in sales a year ago.
Michael Balmuth, vice chairman/ceo, said, “August same store sales were slightly ahead of our expectations for a 2% to 3% gain. Our performance continues to benefit from our ability to offer value-conscious customers a wide array of terrific brand-name bargains while strictly controlling inventories and expenses.”
Bestselling classifications were dresses and footwear, while Florida was the best-performing market.
Looking ahead, the company continues to forecast same store sales of up 1% to 2% for both September and October.
●Stein Mart‘s August comparable store sales declined 7.5% as Hurricane Irene took a bite out of its biggest promotion of the month. Total revenue slid 8.7% to $73.9 million.
Strongest performing categories included ladies’ dresses, casual sportswear, intimate apparel and costume jewelry. Softness was reported in ladies’ special sizes, accessories and the home category.
Year-to-date revenue at stores open at least a year fell 0.7%, while total revenue slipped 1.6% to $647.6 million.
●TJX reported that August sales were $1.72 billion, up 4% over last year, and comparable store sales were up 1%. However, the company noted that results were dampened by Hurricane Irene.
“Our August comparable store sales were in line with our expectations on both a consolidated basis and at The Marmaxx Group, our largest business,” said Carol Meyrowitz, ceo. “Sales were trending towards the high end of our expectations through the third week of the month, but the impact of Hurricane Irene hurt business in key markets throughout much of the fourth week, causing us to come in towards the low end of our expected range. That said, we have seen business rebound solidly, early in the September reporting period, and remain comfortable with our sales and earnings guidance for the third quarter.”
●Costco said August comparable store sales grew 11%, topping analysts’ average estimate for a 9.3% increase. Net sales came in at $6.9 billion, a year-over-year increase of 17%. Excluding the effects of gas price inflation and foreign currencies, comparable sales rose 7%.
Costco also saw higher sales in non-essentials such as jewelry and men’s apparel. Electronics and computers sales were lower, however.
The company announced that that its co-founder and CEO, Jim Sinegal, would step down starting January 1, with Craig Jelinek, currently president and COO, taking his place.
●BJ’s Wholesale said Hurricane Irene actually helped lift its August sales as consumers stocked up on supplies in days leading up to the storm. Comparable store sales were up 11.5% with the fourth week of the month, leading up to Irene, having the best sales.
The company estimated that Irene had a positive impact of 2.5% to 3% on its comparable store sales.
Sales of food increased by about 10%, sales of general merchandise increased by about 4%, BJ’s said. In June, BJ’s disclosed plans to go private after reaching a $2.8 billion agreement with two private equity firms, Leonard Green & Partners and CVC Capital Partners.