NEW YORK — Coolness, both in the temperature and consumer reactions to spring assortments, led to lackluster May sales and will hold comparable-store sales results for the month at or below plan in most cases, one analyst group forecast Monday.

This story first appeared in the June 4, 2002 issue of WWD. Subscribe Today.

Yet, even with Gap expected to land with yet another double-digit comp decrease, results generally will be better than last year.

According to the overall Salomon Smith Barney monthly sales index, retail sales in May are expected to be up 2.2 percent, versus a 0.8 percent increase in May 2001. Wal-Mart and Target, benefiting from Kmart’s woes and generally budget consciousness among the citizenry, are expected to again set the pace for the market.

May sales historically are 30 percent of second-quarter sales and are typically driven by full-price summer apparel and the tag ends of spring clearance.

In particular, the SSB retail team, on a conference call Monday previewing the monthly results, said sales during the third week of the month were generally disappointing, with Target, J.C. Penney Co. and Sears, Roebuck & Co. all posting below-plan sales results. By contrast, they said Wal-Mart and Federated were on plan, while Dollar General was a strong performer, exceeding plan in May.

The analysts noted that sales results from the Memorial Day weekend showed a weekly sequential improvement. In addition, some retailers were impacted by the fact that May was a four-week month on the retail calendar, pushing some sales event into June. Most retailers will report monthly results this Thursday.

On the specialty side, analyst Maura Hunter Byrne said she is expecting “some risk to sales plan, given the choppy traffic patterns and the unseasonably cool temperatures, which may have hindered sales of full-price summer apparel and probably earnings upside.” According to Byrne’s estimates, the SSB softline same-store sales index is projected to slip 2 to 4 percent, compared with a 5.2 percent decline last year and slightly below the pace of the first-quarter index, which was down 1.6 percent. Excluding results from Gap, which constitutes 25 percent, results could range between down 1 percent to up 1 percent.

“Management is keeping their fingers crossed for the month of June now that the warmer weather is here,” Byrne said.

By company, Gap’s monthly sales are forecast to fall 12 to 14 percent, versus a 10 percent drop last year. Gap said in announcing chief executive officer Millard Drexler’s retirement, on May 21, that May sales were trending better than its first-quarter 17 percent comp decline. By division, Banana Republic is expected to be down 7 to 9 percent, Gap down 16 to 18 percent and Old Navy down 9 to 11 percent.

On the other hand, Limited Brands comps are expected to rise 2 to 4 percent, on the back of a 6 percent decline last year. Byrne noted that Victoria’s Secret, up 4 to 6 percent, and Express, up 7 to 9 percent, should lead the way for a strong showing from the Columbus, Ohio-based retailer.

Other specialty stores expected to show negative results include Abercrombie & Fitch, projected to fall 6 to 8 percent; Ann Taylor, down 3 to 5 percent, and Talbots, in line with management’s estimates, down 10 to 12 percent.

On the broadline side, the index is expected to improve 2.9 percent against a 1.6 percent increase last year. Again, Wal-Mart and Target are expected to fly faster than Spider Man up a skyscraper, with estimated increases ranging from 4 to 6 percent (versus 3.8 percent last year) and 1 to 3 percent (versus 9 percent), respectively. Wal-Mart’s seasonable business improved throughout the month, along with the weather, though it is still behind plan.

Shari Schwartzman Eberts, a broadline analyst at J.P. Morgan Securities, said she expects generally below-plan results, especially from the department stores, for May. Kohl’s is expected to finish the month above plan, while Saks Fifth Avenuue and Wal-Mart should be on plan, she said.”

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