So far this season, for the retailers who have reported quarterly results there’s been an equal number of companies beating or missing analysts consensus estimates.

The misses reflect overall softness in the market during the second quarter, which has been particularly challenging for fashion apparel retailers. But at least two companies noted in their reports that women’s wear was a top performer — possibly signaling a shift back to apparel purchases.

According to Thomson Reuters, 48 percent of companies that have reported quarterly comparable-store sales to date exceeded estimates while 48 percent have missed. Four percent have posted comps that were in line with estimates.

The analysts noted in its same-store sales “scorecard” that the biggest misses included Kohl’s Corp., which reported a 0.1 percent comps gain for the quarter – below the 1.5 percent estimate. Also cited was The Buckle Inc., which delivered a 1.7 percent decline, which was below the 0.3 percent expected gain in same-store sales.

One of the biggest surprises, Thomson Reuters said, was Coach Inc. with a 19 percent decline, which compared with an expected 21.4 percent decrease in comps. Kate Spade Co.’s 10 percent same-store sales gain for the quarter also surprised as it was ahead of a 7.7 percent estimate. Kate Spade also made the “best reported” list with its results.

Researchers at Thomson Reuters said in their report that second-quarter results at retail will be generally weaker, and impacted by several factors. “Among the reasons for [second-quarter] weakness, expect to hear that the strong dollar is affecting earnings abroad and tourist traffic, West Coast port disruptions, currency exchange rates, rising wage expenses, weak store traffic and tougher [same-store sales] comparisons,” they noted, adding that “lower gas prices cause for weak year-over-year retail sales comparison.”

Analysts at Telsey Advisory Group agreed in a separate report, noting that they “believe that trends could remain choppy in the second quarter across specialty retail, with West Coast port delays leading to incremental promotions, a stronger dollar and a later start to the back-to-school shopping season providing potential headwinds.”

But with specialty retailers as a segment showing stronger sales in July, the market could be shifting for the better. IHS Global Insight analysts said the “consumer spending outlook for the third and fourth quarters is also looking relatively bright, due to real disposable income gains, modest consumer price inflation, lower energy prices, relatively good employment gains, and a housing market that is gaining traction.”

The Telsey analysts said in their report that with the “consumer increasingly receptive to product newness, visibility into fashion trends into the back half of the year is improved relative to the last several years, in our view.”

“With boho styling, prints, high-waisted bottoms and loosening silhouettes, we see fashion driving demand in the second half of this year,” the analysts added. “In the meantime, the long-standing shift away from apparel and towards accessories may be slowing to some degree, and an uptick in denim may benefit the specialty apparel channel.”

Meanwhile, Nordstrom Inc. said in its quarterly report yesterday that women’s apparel performed well. And Stein Mart, which reported a 3 percent same-store sales increase for the second quarter noted that women’s apparel — especially dresses — was a “top performer” in the period.

load comments
blog comments powered by Disqus