Less bad was more than good enough for retailers reporting September same-store sales Thursday as cooler weather combined with a later Labor Day, and perhaps even some pent-up demand, to give results a slight lift.
While declines still outnumbered gains, although by a smaller margin, many stores beat their own expectations and those of analysts. A number of companies boosted earnings projections for the third quarter and beyond even as they “anniversaried” the onset of the credit crisis. Aiding the quest for higher profits was a continuing emphasis on inventory control, which some experts fear could put fourth-quarter sales opportunities at risk.
According to a Goldman Sachs September same-store sales composite index, not only did retailers top estimates with a 0.2 percent decline versus a forecasted 2.7 percent drop, but all three retail segments beat projections. September’s showing was the best since a 0.1 percent advance in April.
Wall Street was impressed with the results. The S&P Retail Index rose 6.98 points, or 1.8 percent, to 386.86, its fourth consecutive day of increases, and the comp-store sales data also contributed to smaller gains for the Dow Jones Industrial Average, ahead 0.6 percent to 9,786.87, and the S&P 500, up 0.8 percent to 1,065.48. Adding to the atmosphere of a retail recovery, and to stocks’ upward motion, was a report from the Labor Department that jobless claims last week hit their lowest level since January and were down for the fourth time in five weeks.
Still, the prospects for recovery remain far from certain.
“It’s a pretty low bar at the moment. I hope we’re not all kissing frogs here,” said Alix Partners LLC managing director Matt Katz. “Things are currently improving, but the question is, relative to what?”
Considering last year’s financial fallout, comp-store sales will continue to progress, Katz pointed out, but he expressed concern over apparel sales, with department and specialty stores affected the most.
Until unemployment begins to stabilize, consumers will continue to shop at value-oriented chains such as discounters, drugstores and club stores, he said. “I do not think the macroeconomics are aligned yet.”
In a Retail Forward survey conducted in September, consumers said they would keep their spending plans restrained for the month ahead, as well as for holiday.
“September’s numbers are a good sign that retail sales are on a path to recovery,” said Retail Forward senior economist Frank Badillo. “But it will be a slow, bumpy road as shoppers are cautious about easing the grip on their spending plans. It will take more time for sales declines to turn into gains for all retailers, and not all of them will benefit equally.”
This was evident among upscale department stores Saks Inc. and Neiman Marcus Inc., where declines moderated to 11.6 percent and 17.6 percent, respectively. Nordstrom Inc. topped estimates with a 2.4 percent dip.
While the upper tier struggled, the value channel continued to excel. Same-store sales at mass merchants tracked by WWD rose 2.9 percent, significantly better than September 2008’s 0.6 percent decline.
Off-pricers continued to lead the pack. Ross Stores Inc. boasted the segment’s best results, as the discounter reported an 8 percent gain for the month and lifted third-quarter earnings projections to 75 cents to 77 cents a diluted share, up from 44 cents, and fourth-quarter earnings per share of 88 cents to 94 cents. The TJX. Cos. Inc. posted a 7 percent increase for September and revised its third-quarter outlook to 71 cents to 74 cents a share versus 58 cents a share. Fourth-quarter EPS is expected to be in the range of 60 cents to 66 cents, up from 58 cents.
According to Lazard Capital retail analyst Todd Slater, “Although channel inventory is lean, TJX does not appear to be noticeably lacking any high-quality brands and merchandise. Further, an economic upturn should drive higher discretionary purchases, and with ‘value’ becoming a sustaining paradigm, TJX’s newly acquired customers should stick.”
@fearofgod and @maxfieldla have teamed up on a pop-up installation. The store, located in the gallery space across from Maxfield’s Melrose Ave location, is the site of the brand’s House of God pop-up in which Fear of God founder @jerrylorenzo has created a church-inspired installation. A dozen vintage church pews sit in front of an LED screen playing 90s gospel singers in an effort to re-create an environment akin to a Southern Baptist Church, Lorenzo explained. Read more about the pop-up on WWD.com #wwdfashion (📷: Jennifer Johnson)
Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
Eighty degree temperatures and outdoor installations at the annual Art Basel Miami Beach called for bright, elevated beachwear. See more street style pictures on WWD.com. #theyarewearing #ABMB (📷: @lifeinreverie)
Following September’s emotional tribute to her brother Gianni, Donatella Versace wanted to bring the spring show’s deep sense of intimacy to her @versace_official pre-fall collection. Donatella found inspiration in Versace Palazzo in Milan and from Gianni’s opulent apartment. Archival patterns and new motifs were splashed on silk shirtdresses and fitted jersey frocks. See the rest of the photos on WWD.com. #wwdfashion
Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)