Retailers couldn’t win for losing in January, according to Thomson Reuters’ same-store sales preview.
The same-store sales index is expected to show 0.2 percent growth for January, which is significantly lower than January 2015’s 1.5 percent gain. January’s expected decline is due to added inventory from weak holiday sales, which also means more clearance merchandise. Weather was also a factor. After record warm temperatures in November and December, January chilled up, but also dumped a ton of snow that kept shoppers away from the malls.
Same-store sales are reported this Thursday.
Analysts polled by Thomson Reuters said they expect the apparel sector as a whole to deliver a 1.3 percent decrease in same-store sales. Last year, they reported a gain of 1.7 percent. The blame for the drop is being placed squarely on The Gap, otherwise, apparel would improve at 1.3 percent. However, that is still a big drop from the group’s gain of 7.3 percent for January of last year.
The three brands expected to post the best same-store sales results are L Brands, Stein Mart and Rite Aid. L Brands is expected to deliver a comparable-store sales increase of 2.2 percent. L Brands said during its presentation last month at the ICR conference that it saw no problems with mall traffic. Chief financial officer Stuart Burgdoerfer said, “In the malls, people are concerned about mall-based retailing and shift to online and just general patterns. Our real estate is in great shape.”
Zumiez Inc., the Buckle Inc. and The Gap Inc. are expected to show weak comps. Zumiez is projected to report a same-store sales drop of 9.7 percent. Zumiez said during its third-quarter conference call that it expects comparable sales results for the fourth quarter to range between a decline of 14 to 16 percent.
January also tends to be the last quarter of the fiscal year for many companies, and many retailers have already given negative guidance. As a result, analysts have been downwardly revising their estimates. Thomson Reuters’ quarterly same-store sales index is composed of 83 retailers, and is expected to post a 1.1 percent gain for the fourth quarter, which is lower than last year’s 2.8 percent increase.