NEW YORK — Prompted by a thaw in the weather and geopolitical conditions, as well as an abundance of sales signs, consumers got back to shopping in May.

More of the nation’s retailers managed to eke out comparable-store sales gains than declines in May, reflecting more aggressive markdown activity to help clear high spring-summer inventories. The combination of markdowns and a rainy Memorial Day weekend drew consumers previously stricken with cabin fever to the malls, particularly in the Northeast.

According to Dan Barry, managing director at Merrill Lynch, 71 percent of retailers were either in line or above plan, the highest level since June 2002. Among 50 retailers tracked by WWD, 27 had comp gains, 21 had declines and 2 were flat, the first time gainers outnumbered decliners since last October.

Overall, the Goldman Sachs monthly index of monthly same-store sales rose 1.5 percent in May, compared with a 2.4 percent increase last year, but slightly better than the 1.4 percent increase expected. Specialty stores outperformed the industry, growing 3.1 percent, versus a 2 percent decline last year. Discounters extended 2.3 percent, versus 5.9 percent in 2002, and off from the 2.9 percent expected.

Again, department stores were the weak link, declining 1.1 percent last month, but better than the 3.4 percent drop experienced last year and better than the 2 percent dip expected. Inventory levels are a major hurdle for the segment.

Still, Wall Street took the results as a good sign, lifting retail issues. The Standard & Poor’s Retail Index gained 1.2 percent, to 330.48, while the Dow Jones Industrial Average rose 0.03 percent, to 9,041.30, and the S&P 500 was up 0.4 percent, to 990.14.

“To see summer merchandise sold before fall goods arrive, we need a little sunshine,” Dana Telsey, an analyst with Bear, Stearns, quipped as the sun emerged for the first time in days in New York.

Still, retail observers say they remain uncertain about the earnings outlook for the current second quarter, as June, the most important month of the quarter given that it accounts for 40 percent of sales, is a clearance month and fall shipments begin in July.Most alarming, budget-conscious consumers appear to be increasingly conservative, as Wal-Mart and Target did not have good months. The Target division reported a lower than expected 1.4 percent comp increase, while Wal-Mart’s 2.1 percent comp gain was in the middle of its planned range.

Wal-Mart also said inventories were too high, especially in apparel and seasonal goods. A Wal-Mart spokeswoman, on a recorded call, noted, “The mid-month paycheck cycle in May was very pronounced, indicating that consumers are experiencing liquidity issues between pay periods.”

While Gap Inc.’s growth spurt continued, specialty stores were a mixed bag, benefiting from easier comparisons, pent-up demand and increased promotional activity. Upside surprises came from American Eagle Outfitters, up 0.4 percent and Ann Taylor, up 9.4 percent, both which used discounts to drive sales, while Gap, Pacific Sunwear, and Chico’s FAS reported double-digit increases and did less promoting. On the other hand, Abercrombie & Fitch saw a decline in comps of 7 percent, despite using more promotions than in April, although still less than last May.

Dorothy Lakner, a retail analyst with CIBC World Markets, said, “With all the doom and gloom we have heard about the sector and the consumer, the retail and apparel industry is really holding up reasonably well.” In particular, she applauded those retailers who offered something different to their customers or have improved their merchandise mix, like Gap. Those stores have been rewarded with stronger margins and sales growth, she noted, adding that many stores also have gotten smarter about promoting in ways that help build repeat business, such as bounce-back coupons.

“I don’t think the consumer has gone away,” Lakner said. “Customers will come out, but I think it may take more promotions to get them there.”

Looking ahead, Merrill Lynch’s Barry said that, although he is anticipating sales to be soft in June, he expects momentum, helped again by increasingly easy comparisons, to turn positive in July and beyond.

SPECIALTY STORES

Gap Inc.’s comps continued to climb, as May’s 10 percent increase represented the firm’s seventh straight month in positive terrain. All units reported positive results, ranging from Old Navy’s 13 percent spike to Gap’s 8 percent boost and Banana Republic’s 2 percent advance.Overall, total company sales and merchandise margins met expectations as markdown margins improved and it ended the month with the percentage of total marked-down inventory below the year-ago level.

At Limited Brands, overall comps increased 1 percent, while apparel comps decreased 1 percent. Total inventories ended the month up 5 percent, while apparel inventories increased 1 percent. By brand, Bath & Body Works exceeded expectations by reporting a 3 percent comp increase; followed by a 1 percent comp increase at Victoria’s Secret, slightly below expectations, as bra and panty sales offset disappointing beauty results. At its apparel stores, Express comped down 1 percent, slightly below plan, hurt by its women’s division, and Limited store comps were up 1 percent, above expectations. LB said it expects to report a low-single digit positive comp in June.

Ann Taylor Stores experienced a 9.4 percent comp increase, including a 9.7 percent gain at AT stores and a 10.6 percent advance at its Loft division. AT results were driven by promotions, leaving it in a good inventory position. The firm raised earnings guidance for the second quarter to 39 to 41 cents.

Leading the teen scene, Pacific Sunwear of California again reported stellar results, this time a 13.2 percent comp increase, with PacSun comps up 12.5 percent and Demo up 20.1 percent. All classifications posted positive comps, led by women’s with a strong double-digit increase. Footwear and accessories also managed double-digit comp gains while men’s rose 3 percent. Based on May sales results, PacSun raised second-quarter earnings guidance a penny to 20 cents a share.

American Eagle Outfitters welcomed news of a comp gain of 0.4 percent, with a 1.1 percent rise at the AE brand offset by a 9.4 percent drop at Bluenotes/Thriftys. At AE, women’s comps increased in the mid-single digit range, offset by the continued negative trend in its men’s business. Other strong showings came from Bebe Stores (4.2 percent), Gadzooks (5.1 percent) and Hot Topic (3.2 percent).

On the other hand, Wet Seal’s torpor continued with a 25 percent decrease, while Abercrombie & Fitch was down 7 percent and Aeropostale receded 1.5 percent.Women’s advancers included Chico’s FAS (11.7 percent), Cache (4 percent) and Christopher & Banks (1 percent). Failing to meet year-ago levels were Charming Shoppes and Talbots, which had comp decreases of 3 percent and 5 percent, respectively.

DEPARTMENT STORES

May sales were slightly better than anticipated for department stores, although merchants still appear to have their fingers poised on the promotional trigger as they keep an eye focused on their inventories.

The brightest department store stars this month were in the luxe constellation: Nordstrom’s comparable-store sales perked up 3.4 percent andNeiman Marcus Group’s rose 5.2 percent.

Also beating the pack, J.C. Penney Co. posted positive comps in all merchandise divisions, aggregating in a 3.2 percent same-store gain at its department stores. The best performances for the month came from children’s, fine jewelry and family shoes.

The comp gainers for the month also included a couple of regional department stores. Gottschalks’ same-store sales rose 3.4 percent while Elder-Beerman Stores picked up a 1.5 percent increase.

Much of the rest of the sector, though, slogged along in May.

The usually robust Kohl’s Corp. managed to nudge its comp sales up only 0.1 percent in May. Adding in new stores, though, the hybrid department store-discounter’s top line expanded by 13.9 percent.

Same-store sales dropped 3.9 percent at May Department Stores, which operates the Lord & Taylor and Kaufmann’s nameplates, among others.

Federated Department Stores comped down 0.8 percent for the month. Still, the corporate parent of Macy’s and Bloomingdale’s beat its expectations for a 2 to 3 percent drop.

Sears, Roebuck & Co.’s domestic comps slid 1.9 percent for the four weeks, with strength in home appliances and lawn and garden. Women’s apparel, though, came up flat for the month while apparel overall was down by a percentage in the mid-single-digit range.Dillard’s comp and total sales fell 7 percent for the month. Saks Inc. posted a 1.6 percent same-store dip for the month, comprised of a 0.2 percent regression at its department stores and a 3.8 percent slide at the Saks Fifth Avenue luxury unit.

MASS MERCHANTS

Even with the added incentive of expanded food selections to lure consumers, neither Wal-Mart Stores nor Target Corp. registered a particularly impressive May performance.

Wal-Mart Stores’ U.S. comp-store sales rose 2.1 percent, in line with results from the firm’s namesake division. Sam’s Club came up with a slightly milder 1.8 percent comp increase.

“Inventory levels remain above our goal of growing inventories at half the rate of sales,” said a spokeswoman. “However considerable improvements in inventory levels have been made in apparel and other seasonal categories.”

For June, the megaretailer is looking for same-store sales to rise 2 to 4 percent.

Target Corp. overall comped up 0.7 percent in May, while the discount division showed 1.4 percent rise. The firm’s department store divisions didn’t fare as well, though, with a 3.8 percent comp drop at Mervyn’s and a 3 percent dip at Marshall Field’s.

“While we are satisfied with the way this quarter has begun, June’s contribution to our second-quarter earnings performance is typically more significant than either May or July,” said chief executive Bob Ulrich in a statement. A spokeswoman on a recorded call added that inventories were in “good condition” across the company.

Target’s looking for a 1 to 3 percent same-store rise at its discount division in June, with the overall corporate mark lagging that result by 0.5 to 1 percent.

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