Retail Comp Sales in June Once Again Beat Forecasts

In Reports, What's New, Industry News by Jeff Prine

Only a handful of major retailers still release monthly sales results

Only a handful of major retailers still release monthly sales results

New York—Retailers sailed past estimates for their June comparable store sales results as better weather and lower unemployment helped consumers open their wallets.

According to Retail Metrics, a research firm, comparable store sales last month rose 5.7% from a year earlier. Retailers sailed past analysts’ forecasts for a 4.9% gain, making it the fourth straight month retailers beat estimates. (The tally doesn’t include Gap Inc. which reports after the close today. See below).

“The monthly reporters turned in solid results for the month of June, fueled by a myriapod employment picture, heavy promotions and favorable weather conditions,” said Retail Metrics president Ken Perkins.

Perkins says he’s not surprised at the “relatively robust” results, given the improved traffic levels, and promotions

But he remains cautious: “It certainly doesn’t signal that all is clear for retailers. We had a number of retailers over the last couple days raise red flags that the consumer still isn’t feeling particularly strong. I don’t think a 5.7% increase for monthly reporters suggests there is a strong rebound taking place in the retail space by any means.”

Michael Niemira, ICSC vice president of research and chief economist, said, “The month certainly ended on a high note, and while ICSC’s June expectations remain the same, there is some bias towards a slightly stronger increase for the month.”

June comp sales are expected to grow about 3.5% on a year-over-year basis. May same-store sales improved by 4.6% .

The vast majority of retailers, including Macy’s, Kohl’s, JCPenney, Walmart etc., no longer report monthly sales. Of those that do still, less than a dozen, the results only offer a slice of what’s going on at retail.

To get a better idea of how individual retailers did in June, take a look at the following:

●L Brands Inc., owner of Victoria’s Secret, said today that comparable store sales rose 2% in June from the same month a year ago. That was below the 3.1% rise analysts expected.

The company said total sales in the five weeks that ended July 5 rose 6.8% to $1.176 billion, compared with $1.101 billion in the same period a year ago.

●The Gap Inc. reported its June sales results, with the month’s net sales increasing compared to last June, while comparable store sales were down slightly.

Net sales for the month were $1.54 billion, which is almost a 1% increase over last year’s net sales of $1.53 billion for the comparable period. Comparable store sales for June were down 2%, while last year’s June comps were up 7%. Gap Global comps were down 7% for the month, Banana Republic comps were also down 7%, and Old Navy’s June comps were up 7%.

Chairman/CEO Glenn Murphy said, “Old Navy’s performance was stellar this month, and we’re pleased to see the brand continue its strong quarter-to-date momentum. Despite softer June results at Gap and Banana Republic, we remain focused on delivering in the upcoming Fall season.”

●Buckle Inc. posted comparable store sales edged up 0.7% in the week ended July 5, beating expectations of a 0.6% decline.

That leaves the company with a year-to-date decline in same-store sales of nearly 1% compared with the same period in 2013.

The company posted total sales growth of 2.8% to $84.8 million from $82.5 million a year earlier. Year-to-date total sales are up just 0.8% to $428.4 million, from $425 million in 2013.

  • Zumiez Inc., retailer of sports-related teen apparel, footwear, equipment and accessories reported a 3.1% rise in comparable-store sales for the five-week period ended July 5, compared with a comps increase of 1.0% for the five weeks ended Jul 6, 2013. Moreover, net sales for June rose 11.1% to $65.3 million from $58.8 million reported in the year-ago period.

Bolstered by better-than-expected net sales results, the company has raised its sales and earnings forecast for the second quarter of fiscal 2014. Zumiez now expects sales for the quarter to come in the range of $174 to $176 million compared with the previous forecast of $167 to $171 million.

Similarly, earnings are anticipated to come in between 19 cents and 21 cents per share, up from the earlier guidance range of 12 cents to 16 cents.

●Cato Corp. reported that same-store sales for the five weeks ended July 5, 2014 increased 3%. Sales were $92.0 million for the five-week period, a 7% increase over sales of $86.1 million for the five weeks ended July 6, 2013.

Sales for the twenty-two weeks ended July 5, were $460.9 million, up 6% over sales of $435.0 million for the twenty-two weeks ended July 6, 2013.

“June same-store sales were in line with our year-to-date trend,” said John Cato, chairman/president/chief executive.

●Stein Mart said comparable store sales rose by 2.6% in the month of June.

The company posted total sales of $113.2 million, up 3.8% from $109.0 million during the comparable period in 2013. Geographically, Florida, the Carolinas and California generated strongest sales in June, while the Gulf States and Texas were more challenged.

The company operated 265 stores at the end of June this year compared with 262 stores last year.

●Costco Wholesale reported a 66 rise in its June comp sales sales that beat analysts’ estimates, helped by higher fuel prices.

Excluding the impact of foreign exchange rates and gasoline prices, comp sales rose 6% for the five-week period ended July 6.

Analysts expected comp sales to rise 5.4 percent for the month of June.

June net sales rose 10% to $10.89 billion.


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