According to Thomson Reuters, comparable store (or same store) sales rose 4% last month, beating economists’ expectations for a 3% increase. Excluding drugstores, comp sales were up 3%, ahead of a 2% estimate.
Of the 10 retailers reporting so far, only Zumiez missed forecasts, rising 1.2% instead of the projected 1.7%. And apparel sales were up 3.3% after a disappointing back-to-school season in September.
Even beleaguered JCPenney reported a 0.9% increase in its October comp sales, the first such increase in two years.
“People were watching a dissolving quarter in September and were nervous about whether it would continue into October,” said Rebecca Duval, a retail analyst at BlueFin Research Partners. “The promotional levels were very high and that kind of worked in terms of driving traffic.”
Another measure by Retail Metrics showed comp store sales last month rising 3.7% over the same period last year.
Ken Perkins of Retail Metrics called the October results “somewhat encouraging.” Perkins, and many other analysts, were concerned about October results and what they might portend for the holiday season, which accounts for as much as 40% of annual revenue for most retailers.
‘Steep Discounting’ for Holiday?
However, Perkins noted that since October is a transitional month and that back to school sales have a higher correlation to how holiday sales might materialize, you can put too much reading into October numbers.
“Steep discounting is likely to be the order of the day from now until the New Year and could drive better-than-expected sales,” Perkins said. “Furthermore, economic growth looks to be modest, but tenuous heading into the crucial holiday season.”
In another tally from the International Council of Shopping Centers (ICSC) showed a 4.1% comp store sales increase.
“Sales trends seemingly are back on track,” said Michael P. Niemira, chief economist for ICSC. “It would appear that the consumer has come back, just at the right time.” (ICSC predicts November comps will increase 3.5% to 4.5%)
Most retailers, including majors such as Walmart, Target, Macy’s, Kohl’s etc., have stopped reporting monthly results over the past years, making it more difficult to gauge the performance of the entire industry.
Hampering the October picture is the fact that Gap Inc. is slated to post results after the market close. Analysts expect Gap Inc. to post a 0.6% gain in October comps.
The following retailers reported their October comparable store sales (and some third quarter sale) results:
●L Brands Inc. (formerly Limited Brands and parent to Victoria’s Secret) reports an 8% increase in October comp store sales. Net sales for the month were $680.5 million compared with $611 million a year ago.
For the 13-week period, net sales were up 6% to $2.17 billion, while comp store sales rose 3%.
Looking ahead to third quarter results, L Brands expects earnings per share at the high end of its earlier forecast of 23 to 28 cents. On average, analysts expect 27 cents a share.
●American Apparel, Inc. reported comp store sales decreased 1% in October. Total net sales rose 1% from last year to $59.5 million.
“Although disappointed with the negative comparable performance of our retail stores in October, we are encouraged by the strength in our online and wholesale businesses, which grew sales 12% and 8%, respectively,” said Dov Charney, chairman/ceo. “As October came to a close, we began to feel some encouraging incremental sales momentum in some markets.”
●The Buckle, Inc. said comparable store net sales for October were up 2.6% from the same period last year. Net sales increased 2.8 to $86.6 million.
Comparable store sales for the third quarter decreased 0.5% from last year. Net sales for the quarter increased 0.9% to $286.8 million, missing analysts’ consensus for $289.65 million in sales.
●Zumiez Inc. reported its comp store sales rose 1.2%, missing analysts’ average estimate for a 1.7% gain. Total sales rose 10.4% to $46.3 million.
An executive of the board sports company said while stores rang up more transactions, on average, but shoppers spent less per purchase. Among the strongest categories were accessories, shoes and juniors, while men’s and boys’ were down.
●Cato Corp. reported its comp store sales for October were down 3%. Total sales increased 4% to $66.7 million.
Third quarter sales rose 1% to $198.8 million while comp store sales decreased 1%.
John Cato, Chairman, president, and chief executive officer, stated, “October sales benefited from some cooler weather during the month relative to the prior year,” said John Cato, chairman/president/ceo. “However, we continue to expect a difficult sales environment through the fourth quarter.”
Looking ahead, the company said it now estimates that third quarter earnings will be in 13 to 15 cents a share, up from previous forecast of 2 cents to 9 cents a share.
●Stein Mart, Inc. said its October comp sales advanced 5.4%. Total sales increased 6.9% to $95 million.
“Our strong sales continued into October, driven by upgraded designer and national brands, great fashion-forward merchandise and value pricing, ” said CEO Jay Stein. “I can assure you that we are working hard to maintain our momentum through the fourth quarter, despite the shortened holiday selling season and highly promotional environment we see around us.
For the third quarter, total sales increased by 6.1% and comparable store sales by 4.8%.
Linens, dresses, women’s career sportswear, women’s and intimate apparel posted the strongest sales for the month, while women’s accessories, men’s furnishings, boutique, casual sportswear and petites were more challenged.
Geographically, sales were strongest in the Southeast and New Jersey, while the Gulf States and most of the Midwest performed lower than the chain.
“October sales also benefited from our first full month of e-commerce,” Stein noted.
●Costco Wholesale Corp reported better-than-expected October comp sales of 3%, ahead of analysts’ estimate for a 2.6% gain. Total sales rose 6% to $8.15 billion.
Excluding the negative impact of foreign exchange and falling gasoline prices, Costco said its same-store sales rose 6%.