Usually the kick-off to the fall selling season—not to mention back to school sales—August this year appears to lag. According to Retail Metrics, comparable store sales last month rose 3.2% from 2012 when they were up 3.3%. And August trails previous months: a 4.3% increase in June and a 4.2% increase in July.
Of the nine retailers tracked by Thomson Reuters, August comp sales were estimated to be up 3.2% compared with a 6.5% increase a year ago.
‘‘Overall, the month was mediocre for sales,’’ said Michael P. Niemira, chief economist at the International Council of Shopping Centers (ICSC). ‘‘The back-to-school season started late and it never had momentum.’’
The ICSC tally of 8 major retailers found comp sales rose 3.7% in August—an increase from the ICSC’s July gain of 3.5% but below the 6% increase in August 2012.
Retailers’ Fall Forecasts ‘Overwhelmingly Negative’
In many of the recent second quarter earnings reports, retailers referred to slower-than-expected sales. Even normally brisk back-to-school shopping was off to a slow start, although some noted that traffic had picked up later in the month.
Hardest hit may be discretionary purchases. “There has been a shift away from spending on apparel and other discretionary items and a shift toward purchases of homes and automobiles,” Jennifer Davis, a retail analyst with Lazard Capital Markets told Bloomberg News today. “The consumer is feeling better and is willing to make larger item purchases but that leaves them with less money in their wallet to spend on other things. The items you can live without, people are living without.”
Concerns about the sales trends in August were evident in retailers’ outlooks, too. Retail Metrics reports that third quarter and full fiscal year forecasts are now overwhelmingly negative. Of 48 retailers tracked, 35 lowered their forecasts after revealing their second quarter results. Only four increased their estimates.
Although economists say the month comp sales figures offer a glimpse into leading trends at retail, they are far from comprehensive. The majority of retailers, including majors such as Walmart, Macy’s, Target, Nordstrom, JCPenney, etc. no longer provide monthly sales reports. The retailers who continue to report account for only 6% of the $2.4 trillion U.S. retail industry sales.
Gap Inc. and Zumiez were expected to report their August sales later today. Among the retailers still reporting their August sales today were:
●L Brands Inc. (formerly Limited Brands), reported August comparable store sales rose 2% in line with analysts’ estimates. Total net sales were up 6% to $704.7 million.
By division, Victoria’s Secret posted a 3% rise in comp sales, ahead of analysts’ estimate for a 1.4% increase. Its Canadian brand, La Senza, reported an 8% comp increase beating estimates for a 2.5% increase.
While the company said its inventory levels were up in August “to support upcoming significant product launches at Victoria’s Secret and Bath & Body Works” for the all important fall/holidayshopping season, the company remains cautious about September estimates.
L Brands was cautious in reporting its expectations for September, Preston said. “We are planning for positive low single digit comparable store sales,” said Amie Preston, chief investor relations officer.
●American Apparel Inc. said its August comparable store sales were up 3% due to a 2% increase at its retail stores and an 11% increase in online sales. Total revenue declined 1% to $55.7 million (which included a 6% sales decline in its wholesale division).
●Buckle, Inc. posted an August comparable store gain of 1% topping analysts’ average estimate for 0.4% increase. Total sales edged up 0.3% to $101.1 million from last year.
●Cato Corporation reported a 5% decrease to $59.2 million, in total net sales during August. Comparable store sales were down 2%.
“August same-store sales were within our range of expectations and consistent with our current trend. We remain cautious in regard to the remainder of the year,” said John Cato, chairman/president/ceo.
●Stein Mart, Inc. said its total August sales were up 3.7% to $83.3 million while comparable store sales rose 3.8%.
Best performing categories included linens, women’s boutique, gifts and dresses while women’s casual sportswear, special sizes, men’s sportswear and jewelry “were more challenged.” Geographically, August sales were strongest in Florida and the Southeast, while the Midwest and California performed lower than the chain.
●Costco Wholesale Corp. reported one of the best comparable store gains of retailers reporting today: an increase of 5%, excluding gasoline, beating estimates for a 3.5% increase.
Among the warehouse club’s stronger performing categories were small appliances, apparel, jewelry, health and beauty, and office, while comp sales for consumer electronics were slightly negative. Top-performing regions included the Texas, the Midwest and the Southeast.