American Eagle was a standout in June, with an 11 percent same-store sales gain.

Lousy weather, difficult year-over-year sales comparisons and macroeconomic factors such as higher gas prices took a toll on June same-store sales.

NEW YORK — Lousy weather, difficult year-over-year sales comparisons and macroeconomic factors such as higher gas prices took a toll on June same-store sales.

As a result, retailers posted comparable-store sales that were not as robust as June of last year, and were softer than April and May of this year.

Of the 50 companies tracked by WWD, 35 reported an increase in same-store sales for June. Department stores averaged a 3.8 percent gain, which compares with a 5.9 percent average gain in the same month last year, while mass merchants posted a 3.3 percent average sales gain, versus 6 percent in 2005. Comps at specialty stores showed an average increase of 2.2 percent in June, which compares with a 9.8 percent increase in 2005.

Despite the tough comparison to last year’s strong June sales figures, American Eagle, Ann Taylor, Christopher & Banks, Guess and Zumiez all turned in double-digit same-store sales increases.

Looking at results for the broader retail sector, the International Council of Shopping Centers said chain store sales for June rose 2.6 percent year-over-year. The average sales gain for the previous five months was 3.8 percent, ICSC said. Results were close to what analysts had expected.

“Given all the challenges chain stores faced throughout June, the overall results were in line with our expectations, though on the low end,” said Michael Niemira, ICSC’s chief economist and director of research. “June tends to be a transitional month for retailers as they begin to make room for fall merchandise.”

“The performance varied considerably across the retailing sector. We had Wal-Mart finishing on the low side, but we also continue to find companies that are going for higher income consumers doing fairly well,” said John Lonski, chief economist, Moody’s Investors Service.

The department store category saw respectable increases in June same-store sales on top of a strong performance in June 2005, with all but one company reporting gains. The luxury sector continued to be protected from the economic forces that impact discounters like Wal-Mart, sources said.

“There’s nothing to despair about. [Results are in line] with a gradual, measured slowing of consumer spending within which some retailers will stand out. The slowing of same-store sales was not evenly distributed in the month of June,” said Lonski.

This story first appeared in the July 7, 2006 issue of WWD. Subscribe Today.

Merchandising efforts at Kohl’s and J.C. Penney paid off for the mid-tier retailers, said Kim Piccolia, analyst at Morningstar. Kohl’s had the largest year-over-year growth in the segment despite also having the toughest comparison with 2005, with a same-store sales increase of 7.1 percent. In June 2005, Kohl’s posted a 14.4 percent sales gain. Penney reported a 4.3 percent gain in June, compared with a 7.4 percent increase in 2005.

In a conference call, Kohl’s cited better-than-expected sales of seasonal apparel such as shorts, tanks and capris, and strong sales early in June with the onset of summer-like weather bolstering comps.

Other standouts in the department store segment included Neiman Marcus with a 7.7 percent increase, Saks Fifth Avenue with a 5.3 percent gain and Nordstrom with a 4.7 percent increase. The one soft spot for the segment was Dillard’s, which reported a 1 percent decline against flat growth the prior year.

In the specialty channel, the biggest standout was American Eagle, which posted an 11 percent comp gain. The increase is up against a 28 percent gain in 2005. Dorothy Lakner, equity analyst at CIBC World Markets, said in a research note that American Eagle’s performance is impressive in light of the fact that it deliberately reduced promotional activities this year versus last. Based on its sales performance, American Eagle increased its earnings per share guidance for the second quarter to a range of 41 to 43 cents per share from a prior estimate of 39 to 41 cents.

Ann Taylor and Zumiez reported the largest boost in the specialty segment with gains of 12.5 and 12.4 percent, respectively. Zumiez’s comps were up against a 10.7 percent gain in 2005, while Ann Taylor’s increase compared with a decrease of 1.2 percent in the prior year.

Guess reported an 11.7 percent increase in comps for June 2006, over an 11 percent gain the prior year, and Christopher & Banks reported a 10 percent gain on top of 5 percent the prior year. Also impressive was Chico’s, which reported a 5.1 percent increase on top of an 18.8 percent gain for the year-ago period.

Abercrombie & Fitch surprised some analysts by reporting a 4 percent decline in comp-store sales. The retailer faced one of the hardest comparisons against June 2005, having recorded same-store sales growth of 38 percent.

Gap, Banana Republic and Old Navy all declined, 4 percent, 4 percent and 6 percent, respectively. “We expect that merchandise margins will continue to experience pressure in July as we clear remaining summer items for the arrival of fall merchandise late this month,” said Sabrina Simmons, senior vice president, treasury and investor relations, in a statement. The company said it expected lower margins this year as a result of efforts to clear out summer merchandise.

“Within specialty, you continue to see volatility with the younger teen set. Retailers have missed the mark in terms of knowing what customers want or they are overstocked and have to take significant markdowns,” said Janet Hoffman, partner in Accenture Ltd.’s retail practice. “The sub industry of teens is struggling.”

Hoffman said the specialty retailers who are having success reaching their core shoppers will likely do well with back-to-school as well as in the holiday shopping season later this year.

The mass segment turned in modest same-store sales increases for June. Wal-Mart’s figures continued to disappoint industry analysts. The company reported a same-store sales gain of 1.2 percent, at the lower end of company expectations of a gain between 1 and 3 percent.

Analysts continued to cite macroeconomic trends on consumers as a potential factor in flagging same-store sales at some chains.

“If anything weighed on same-store sales growth, it was probably higher prices for gasoline as well as higher interest rates,” explained Lonski. He cautioned that interpretation of the overall same-store sales result should be done carefully, as the average masks some strong performances by individual retailers.

“For the second half of the year, we need to be mindful of how the increasing economic pressures of higher gasoline prices and interest rates may begin to take a toll on consumer spending,” said Niemira. Overall, ICSC expects to see same-stores sales in July to increase by 3 to 3.5 percent.

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