September Retail Comp Sales: Solid, not Stellar

In Reports, What's New, Industry News by Accessories Staff

New York–With their back-to-school sales in their final month, and gearing up for fall and holiday merchandise, retailers reported today that their September comparable sales were solid, but not stellar.

Retail analysts take a close look at comparable store sales, or comp sales, as a key retail performance metric to gauge activity at store locations that have been open at least a year.

While there were discrepancies among the metrics reported today, there still were positive signs.

Thomas Reuters, which tracks 19 retailers, had expected comparable store sales to increase 3.6%, lower than the 6.4% rise seen in September 2011.

Over at the International Council of Shopping Centers (ICSC), which reports 22 retailers, September comparable store sales (excluding drugstores) rose by 3.9% in line with the ICSC’s expectation of 3% to 4%.

Another, Retail Metrics, which tracks 20 retailers, said September’s comparable store sales increased 3.9% (excluding drugstores). That managed to top analysts’ average estimate for a 3. 7% gain.

Nonetheless, it was a slowdown from the 5.9% increase that occurred in August.

Specialty apparel chains led the gains with a 5.6% increase in September, while discounters rose 4.3% and department store sales increased about 1.4%.

“This should set up to be a good holiday season,” said Ken Perkins, president of Retail Metrics.

Among those beating comp sales estimates were Gap Inc., Limited Brands, Costco, Ross Stores and Zumiez.

Perhaps hindering this September’s figures were higher gasoline prices and uncertainty around the presidential and other national elections. Still, consumer sentiment hit a four-mouth high last month.

In a report released at the end of September, the Conference Board showed the U.S. consumer confidence index rose to 70.3 in September from an upwardly revised reading of 61.3 in August, beating expectations for a rise to 64.8.

“The holiday season will be a solid success but won’t have numbers off the charts,” said Barbara Kahn, director of the Jay H. Baker Retailing Center at the University of Pennsylvania. “August and September together shows continued moderate growth. Consumers have been shopping.”

Below are September figures from more than a dozen major retailers, which represent about 13% of all major retailers that still report monthly sales figures. Many majors, including Walmart, JCPenney, Dillard’s, and Sears, no longer release monthly sales.

●Macy’s Inc. posted a 2.5% increase in its comparable store sales for September, though that came in short of the 3.3% increase analysts had expected. Total September sales rose 2.7% to $2.36 billion.

“Our sales in the two-month August/September period, which includes the back-to-school season, were consistent with our positive year-to-date trend,” said Terry Lundgren, chairman/president/ceo, adding that the retailer’s omnichannel approach to driving sales, including fulfillment of orders from online or other stores will help it meet consumer demand during the holidays.

●Kohl’s reported that its September comparable store sales fell 2.7%, a bigger drop than the 0.2% decline analysts had predicted. Total revenue for the month fell 1.4% to $1.61 billion.

The department store reported strong selling in shoes, men’s clothing and athletic gear, while weaker sales were in accessories, women’s clothing and juniors.

Despite the drop in September, the company said it stands by its third quarter guidance of 82 to 89 cents a share.

●Nordstrom Inc. said its comparable store sales  rose 4.4% in September, slightly below analysts’ expectations for a 5% gain. Total sales for September sales rose 7.4% to $1.01 billion.

Sales earlier in the month suffered due to returns from a later start date for its big anniversary sale event. Not to mention, it was competing with a 10.7% jump in comp sales from September 20112 when it instrumented free shipping and returns on online purchases.

By region, Nordstrom said stores in the South and Midwest performed best; strongest performing categories were children’s wear, handbags and men’s shoes.

●Bon-Ton announced a slight increase of 0.6% in its September comparable store sales. Total sales increased 0.7% to $288.9 million for the month.

“We gained momentum the final two weeks in the month and finished strong,” said Bon-Ton CEO Brendan Hoffman about September. “We largely attribute our performance to a better-balanced merchandise assortment and refined marketing efforts.”

Best-selling categories in September included jewelry, sportswear and dresses, shoes and women’s large size. E-commerce sales rose in the double digits.

●Stage Stores reported an 11.1% rise in its comparable store sales in September, soaring past the 2.7% gain that was expected. Every merchandise category marked a comparable-store sales increase, with strongest performers including footwear, home and gifts, junior sportswear, misses sportswear, petites and plus sizes. Geographically, the South Central, Southwest and Northeast regions all outperformed, the company said.

●Target Corp. said Thursday its September comparable store sales rose 2.1% in line with what retail analysts had expected. Total September sales were up 2.6% to $6.08 billion.

Noting that its sales were up 3.6% so far this third quarter, Gregg Steinhafel, chief executive, added: “We’re pleased with our sales results through the first two months of the quarter and believe we remain on-track to attain our third-quarter sales and profit goals,”

Target also announced it no longer will report monthly sales starting with its first quarter 2013, which starts in February

●Gap Inc. boasted a 6% increase in its comparable store sales, beating retail analysts’ forecast for a 5.3% increase and reversing its 4% drop in September 2011. Total net sales for September rose 8% to $1.45 billion.

The increases were credits to strong customer demand for merchandise across all its brands. Comps sales increases at Gap North America was 5%; 4% at Banana Republic and 10% increase at Old Navy North America. Comp sales at its international division fell 3%.

●Limited Brands reported a comparable store sales increase of 5% for September, beating analysts’ expectations for a 4.7% increase. Total September revenue declined 6% to $773.6 million, down from $818.6 million a year ago when $96.5 million included sales of its soon-to-be sold off third-party apparel sourcing business.

By brand, Victoria’s Secret was the top performer with a 6% comparable store sales increase, led by a strong performance in the chain’s Pink brand, which targets younger women.

Bath & Body Works comparable store sales in September were up 5% and La Senza posted a 4% decrease in comparable store sales. In addition, Victoria’s Secret direct-to-customer sales, driven in large part by online sales, decreased 5% from last year.

Despite those last misses, Limited Brands expects “low single digit” comparable store sales increases in October, the company said.

●Cato Corp. said its September comparable store sales fell 4% while retail analysts had expected them to be flat. Total September sales edged up 1% to $71.1 million.

“September same-store sales reflect a minimal negative impact from Hurricane Isaac and were mostly in line with our year-to-date trend,” said John Cato, chairman/ceo.

The company now expects third-quarter earnings at the lower end of its projection of 12 cents to 17 cents a share.

● Buckle, Inc. announced September comparable decreased 0.8% while analysts expected a 1% increase. Total net sales increased 0.8% to $99.1 million.

Comparable store net sales year-to-date for the 35-week period ended September 29 increased 3.1%. Net sales for the same 35-week fiscal period increased 5.1% to $679.2 million.

●Wet Seal Inc., which fired former CEO Susan McGalla in July and has begun instituting a fast fashion approach to merchandise, saw same-store sales fall 12.7% in September. But still better than the 18.3% drop in August.

“These results are in line with expectations we had at the beginning of this quarter for progressive improvements from month to month,” the company said in a statement Tuesday.

Both of its divisions saw September comp sales declines, led by a 13.6% drop at Arden B.; Wet Seal had a 12.6% decline.

The company estimated that comparable store sales for October will be “within or slightly better” than originally stated guidance, projecting a fall between 14% and 18%.

“We continue to expect our current performance trend will reverse in the coming months,” the company said. “We remain confident that, as we move into the holiday season, we will see clear signs of improvement and stability in our business, and will ultimately return to a level of sales and earnings that our fast-fashion merchandising strategy has driven for many years.”

●Zumiez lurched ahead in September with a 5.6% comparable store sales increase beating analysts’ estimate for a 3.2% gain. Total net sales for month jumped 18.6% to $62.7 million.

Comps for the nine-weeks ended September 29 jumped 4.6% against a 6.8% increase a year ago.

Looking ahead, the company forecasts third quarter comps to increase in the 3% to 5% range, while net sales are expected in the range of $181 million to $185 million.

●Ross Stores posted a 5% increase in its September comparable store sales, ahead of analysts’ 4.3% estimate. That along–with a total net sales increase in September of 10% to $800 million—prompted the off-price retailer to raise its third quarter guidance.

“The primary driver of our favorable business trends year-to-date remains our ongoing focus on delivering fresh and exciting assortments of name brand bargains that continue to resonate with today’s value-focused consumers,” said Vice Chairman/CEO Michael Balmuth.

Citing its ahead-of-plan sales and slightly better-than-expected shortage results from its annual physical inventory, Ross raised its earnings guidance to between 70 cents and 71 cents a share for the quarter ending Oct. 27. Its August projection was 63 cents to 66 cents. The company also expects an October comparable store sales increase of 3% to 4%.

●Stein Mart reported comparable store sales in September increased 2.4%. Total sales were up 3.9% to $102.7 million. For the year to date, comparable store sales increased 1.3% and total sales increased 2.0% to $761.5 million.

“Early in the month, sales were impacted by hurricane Isaac resulting in a number of stores not being operational for a period of time. Despite this, we were able to deliver positive results this month,” said Jay Stein, interim ceo. “We began to reduce regular priced coupons in November of last year, but this was preceded by a high volume of coupons in October. Therefore, our challenge in October, and the remaining holiday selling season, will be to increase our sales against the prior year which includes the higher amount of couponing.”

Best performing categories were linens and ladies’ career sportswear, while ladies’ accessories, men’s sportswear and ladies’ boutique were weaker. Geographically, September sales were strongest in Texas and Florida, but other states generally all had positive comparable sales, except where impacted by the hurricane.

●TJX Cos. posted a 6% increase in September comparable store beating retail analysts’ forecast for 4.5% growth. Total September sales climbed 10% to $2.5 billion.

“Customer traffic continued as the driver of our comp sales increases at every division, a good indication that our value proposition of great brands and fashions at amazing prices continues to resonate with consumers,” said Carol Meyrowitz, ceo. “Marmaxx also achieved a strong 6% comp sales increase and all divisions delivered excellent performance. We are particularly happy with business at TJX Europe, where comp sales increased 13%.”

●Costco Wholesale Corp.‘s comparable store sales rose 6% in September, beating retail analysts’ estimate for a 4.5% increase. Total net sales climbed 8% to $9.31 billion.

Excluding the impact of higher gas prices and foreign currency exchanges, comparable store sales rose 5% for the total company and its U.S. doors. The figure was 6% internationally.

Costco said its fourth-quarter comparable store sales gained 5%, 6% at its U.S. locations, and 2% at its international locations. Again, excluding higher gas prices and foreign currency, the comp sales figure increased 6% for the total company and its U.S. locations; and 7% at overseas locations.

Total fourth quarter sales increased 14% to $31.52 billion.




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