NEW YORK — The momentum of late May carried into June for a group of retailers filing their same-store sales results early, but analysts were careful not to interpret the positive signal as the start of a second-half turnaround.
This story first appeared in the July 5, 2002 issue of WWD. Subscribe Today.
Still, June results posted on Wednesday — including Neiman Marcus Group’s 1.7 percent same-store sales increase and Christopher & Banks’ 13 percent ascent — came in stronger than some expected and could augur well for when the rest of the retail industry, including its very heaviest hitters, reports results next Thursday. Analysts are more focused on what happens toward the end of the summer, when the arrival of fresh fall merchandise will begin to overshadow the T-shirt and shorts sales of summer.
Todd Slater, a retail and apparel analyst with Lazard Freres, said expectations for June sales have been dampened throughout the month since sales in June “have not been consistently robust, especially for the specialty apparel and department stores.”
Dorothy Lakner, a specialty retail analyst with CIBC World Markets, said, “It’s not going to be fabulous month, but it will not be terrible either.” She noted retailers have slashed inventory levels compared with last year and, while that’s to the detriment of sales numbers, it should limit any downside to second-quarter gross margins.
Luxury goods retailer NMG said comps for the five-week June period rose 1.7 percent as overall sales climbed 3.1 percent to $256 million. In its specialty retail segment, which includes Neiman Marcus Stores and Bergdorf Goodman, comps increased 2.3 percent, benefiting from the shift of a men’s sales event from May last year. Top performing categories included women’s contemporary sportswear and fine apparel, ladies’ shoes and designer jewelry.
Comps at its direct business fell 8 percent as the Dallas-based company sought to reduce catalog circulation and eliminate certain unprofitable catalogs. NMG expects comps in its fourth quarter, which ends this month, to drop 1 to 3 percent.
sults were a positive sign, Eric Beder at Ladenburg, Thalmann & Co. Inc., said, results indicate people want to buy luxury, but at a discount. “The important game starts at the end of July and early August, when full-price selling of fall merchandise begins.”
Minneapolis-based Christopher & Banks Corp., which sells women’s clothes in its 392 specialty stores, posted a better-than-expected 13 percent increase in comps for the four-week June period as overall sales surged 35.8 percent to $23.5 million.
In a statement, Bill Prange, chairman and chief executive, attributed the increases to “continued strong customer acceptance of our merchandise assortment. Sales were robust across all categories with our bottoms business performing particularly well. While the economic environment remains uncertain, we are pleased with these results and remain optimistic about our future performance.”
C&B, which has been reporting stellar monthly results since February, is benefiting from serving baby boomers with limited choices in the mall.
Suffern, N.Y.-based The Dress Barn Inc., which offers value-priced women’s career and casual apparel in 755 stores, reported comps up 4 percent and Philadelphia-based Deb Shops Inc., which sells clothes and accessories to juniors in its 318 doors, announced a 6.3 percent increase in comps.
As the U.S. prepared to celebrate its 226th birthday, retail sales appeared to be doing a good job of weathering economic uncertainty and the well-publicized potential for terrorism.
Earlier in the week, Wal-Mart Stores said it still expects discount-store comp sales for June to climb at the upper end of its 5 to 7 percent target. Meanwhile, Target Corp. said it still expects same-store sales to rise between 2 and 4 percent at Target discount stores, and between 1 and 4 percent for the company overall. The lower range for the total company reflects the slower growth rate and smaller size of its Mervyn’s and Marshall Field’s divisions, Target said.
J.C. Penney Co. and Sears, Roebuck & Co. said same-store sales are trending below plan, while Federated Department Stores said sales are trending flat to down slightly.
Marcia Aaron, an analyst at Pacific Growth Equities, said the early results are “pretty good. Every company that reported had better numbers in June than in May, so that is a positive and hopefully it will carry over to next week.” She said she is expecting same-store sales to be at the upper end of the 2.5 to 3 percent range in June, compared with a 2.9 percent increase in May.