While June comp results were mixed among reporting retailers, there was certainly no swoon.
Stores overcame a slow start and most ended the month with decent gains as promotions and summery weather helped stoke consumer interest.
Thomson Reuters put the gain among reporting retailers at 4.8 percent, above the 3.6 percent advance expected by analysts.
Among the small base of companies still reporting sales results monthly, the numbers received a lift late in the day when Gap Inc. reported its comparable sales — meaning those for stores open at least a year and those attributable to e-commerce — were up 7 percent, well above the 4.7 percent increase expected.
While the Gap and Banana Republic brands fell short of expectations, with a 5 percent increase and a 1 percent decrease, respectively, the corporate result benefited from an increase at the Old Navy brand that was more than twice the one expected — up 13 percent, versus a 5.4 percent forecast, for the single strongest result among reporting stores.
Old Navy’s powerful showing was consistent with a strong performance among retailers emphasizing value and showing solid promotional instincts during the month, according to David Bassuk, managing director of AlixPartners.
“Consumers are leaning towards the value side and rewarding retailers that are offering strong promotions,” he said. “There’s been a more consistent reward for value in recent months.”
He cautioned that the results needed to be interpreted with a number of factors in mind — the small size of the remaining comp sample, the absence of high-end and luxury players among the reporters and the general weakness of June 2012 results.
Although reluctant to include weather in his explanations for retail performance, Bassuk acknowledged that extreme heat and heavy rains may have helped draw shoppers to malls during the month.
“The comparisons get harder and the effect of back-to-school more significant as we get into July and August,” he said. “And you have to be mindful of those who still report, but this is certainly a good barometer as far as middle America goes. It’s a limited and short-term view, but the short-term view today is good news.”
Among the other value players sharing strong results were Costco Wholesale Corp., up 6 percent excluding fuel sales, and Stein Mart Inc., which posted a 6.5 percent comp increase to put its same-store increase for the second quarter to date at 7.3 percent. Both stores exceeded estimates for the month.
Stein Mart’s shares added $1.22, or 8.9 percent, to close at $14.98 in Nasdaq trading Thursday after hitting a 52-week high of $15 in midday trades.
Costco shares also hit a 52-week high, at $115.94, before closing at $115.89, up $2.24, or 2 percent.
L Brands Inc., Victoria’s Secret parent, was flat for the month, lower than anticipated, as Victoria’s Secret’s comps were down 1 percent versus expectations of a 1.4 percent increase.
However, Richard Jaffe, analyst at Stifel Nicolaus, noted, “The comp decrease was primarily driven by lower clearance sales during the company’s semiannual sale event as VS entered the event with fewer clearance units than last year.”
The company pointed out that lower promotional activity helped lift both merchandise margins and merchandise margin dollars during June. It expects comps to rise in the low-single digits in July.
Earlier this week, American Apparel Inc. reported a 7 percent increase in comparable sales for June, including a 5 percent gain in same-store sales.
The month was a bit harder for the two remaining teen retailers in the comp sample, one of which, Zumiez Inc., said it would withdraw from monthly reporting after sharing July results next month.
Zumiez booked a 1 percent comp increase, below the 2 percent expected, while The Buckle Inc. came closer to the mark, registering a 3.4 percent gain that was just 0.3 points below expectations.
Michael Niemira, vice president of research and chief economist for the International Council of Shopping Centers, called the June results “very strong.
“Overall, these data continue to paint an improving picture after a ‘softer’ first quarter — February to April — and are encouraging as we move into the second fiscal quarter of the year,” he said.
ICSC expects June comps to rise between 3 and 3.5 percent.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews