Promotions and tax-free holidays helped pull consumers into stores in August, producing same-store sales gains for the month that generally met or slightly exceeded retailers’ expectations and those of analysts.
While not universal, small sales increases were the norm among stores reporting last month’s results, adhering to Thomson Reuters’ forecast that same-store sales would average about 2.5 percent. Retailers including Saks Inc. and The Bon-Ton Stores Inc. noted that lean inventories limited their top-line results, hurting comparable-store sales but possibly helping third-quarter profits later on.
Retail investors applauded the hint of sales momentum and pushed the S&P Retail Index up 1.9 percent, or 7.99 points, to 419.58 Thursday morning, adding to Wednesday’s 3.7 percent gain. The Dow Jones Industrial Average was basically flat, ticking up 5.87 points to 10,275.34.
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Saks finished with a 1 percent comp increase, trailing the respective gains of 6.3 percent and 2.9 percent registered by upscale rivals Nordstrom Inc. and Neiman Marcus Inc.
Among the department stores, Macy’s Inc. reported a 4.3 percent increase for the month, helped by the introduction of the Material Girl junior brand from Madonna. Results at Dillard’s Inc. were flat while The Bon-Ton Stores Inc. disappointed with a 4.6 percent decline, attributable in part, the firm said, to extremely hot weather and a fairly conservative inventory position.
Midtier merchants Kohl’s Corp. and J.C. Penney Co. Inc. bested estimates with gains of 4.5 percent and 2.3 percent, respectively. Kohl’s noted strong performances in men’s wear and shoes, while Penney’s cited a “very strong start” for its Liz Claiborne program ahead of its official launch and a “solid start” for MNG by Mango.
Among specialty stores battling it out for back-to-school dollars, Abercrombie & Fitch Co. emerged with a 6 percent increase while American Eagle Outfitters Inc. finished the month with a 1 percent increase. Neither Aeropostale Inc. nor The Buckle Inc. was able to post an increase, concluding August with declines of 1 precent and 3.5 percent, respectively.
Gap Inc. was flat in August, with Banana Republic up 6 percent and Gap and Old Navy down 1 percent and 2 percent, respectively.
Limited Brands Inc. again excelled with a 10 percent comp gain, driven by a 15 percent pickup at Victoria’s Secret.
Ross Stores passed off-price leader The TJX Cos. Inc. with a 5 percent comp gain to TJX’s 2 percent advance. Target Corp. logged a 1.8 percent gain, just shy of the 2 percent analysts’ estimate.
For complete coverage, see Friday’s issue of WWD.