Retail sales in July continued to be a mixture of disappointment and mediocrity.
Retailers catering to teens saw a mixed bag of results as teens decided to spend more money at Aeropostale (same store sales up 6%) and Buckle (same store sales up 2.8%), but both retailers missed analysts projections. American Eagle saw an 11% drop in same store sales, on top of the 7% drop they saw this time last year. Abercrombie & Fitch continued their terminal velocity fall with a 28% drop in same store sales. No good.
Macy’s saw a 10.7% drop in same store sales, JCPenney reported a 12.3% drop in same store sales, while Kohl’s managed to eek out a nearly flat month (0.4% increase in same store sales). I guess shoppers are really going nuts over that new line by Avirl Lavigne.
Besides the general state of the economy and unemployment through the course of the year, some analysts suggest that the, recently enacted and more recently refueled, Cash for Clunkers program is diverting money from the retail industry:
“One of the unintended negative side effects of the cash for clunkers program was that it’s going to remove money that probably would have been spent in retail stores and restaurants and is now going to go toward a car payment,” said Purdue Consumer Sciences Professor Dr. Richard Feinberg.
And not just “spare change.”
Feinberg estimates the nation’s retailers could lose up to $300 million a month as consumers spend their disposable income on loans instead of lunch. By the end of what’s expected to be another tough holiday shopping season, losses could add up to between $1.5 billion and $2.5 billion, Feinberg says.
More information on retail sales from the New York Times and Los Angeles Times.
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The stimulus checks have been (presumably) spent, back to school shopping is underway, and the retail sales numbers for July are in and they are, well, pretty ugly. A lot of retailers posting negative same-store-sales numbers for the month, many of them posting numbers that fell below Wall Street’s expectations. Wall Street is responding – as of 12:30, the S&P Retail Index is down around $7.
The negative results are hitting all segments of retailers – from department stores to the mall, teen retailers to mass market merchandisers. Wal-Mart posted a positive sales increase of 3.0%, but that is less than the 3.5% increase that Wall Street was looking for. Target saw same store sales drop 1.2% in the month of July and warn that August isn’t going to be much better. JCPeneny’s sales dropped 6.5% but raised their Q2 guidance “due to better than expected sell-through of promotionally priced merchandise and continued expense management measures.” Kohl’s saw a steep 10.4 drop in same store sales in the month.
Gap saw negative numbers across all brands – Old Navy down 16%, Banana Republic down 8%, and Gap North America down 6%. When are they going to spin off the Old Navy brand, sell it, and let someone else deal with the turnaround?
Teen retailers aren’t seeing the Back to School numbers they hoped for with American Eagle down 7%, PacSun was down 4%, Abercrombie & Fitch (as a company) was down 7% (with only A&F proper posting flat numbers, up 1% for the month. Hollister was down 11% – blowing away the 4.1% decrease expected by analysts), but Aeropostale saw sales jump 13%.
More coverage from CNN/Money, Forbes, and Marketwatch.
Reminder, all of July’s numbers are available to analyze over at our partner site, Retail Numbers.
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The May comp store numbers for the retail industry:
In the mall: Abercrombie up 3.0, Aeropostale down 1.1, American Eagle up 11.0, Ann Taylor up 12.0 , Hot Topic down 6.0, Limited Brands up 7.0, and Pacific Sunwear down 2.6. Gap as a company was down 6.0, however the break down between companies is interesting. Gap North America was down 5.0, Gap International is down 13.0, Old Navy was down 8.0, but Banana Republic is starting to show signs of a turnaround with a 3.0 positive comp.
In the department store sector: Dillards up 3.0, Federated up 9.2, JC Penny up 11.1, Kohls up 3.1, Nordstrom up 7.8, and Saks up 5.7.
In the battle of Target v. Wal-Mart and warehouse stores v. warehouse stores, Target was up 5.7 & Wal-Mart was up 2.0. Sams Club was up 4.0 while BJs Wholesale was up 4.2 and Costco was up 10.0.
Generally a pretty positive month across the board. Gap continues to struggle and Kohls is curiously one of the few companies with positive marks that didnt beat investor estimates. Pacific Sunwear was down 2.6 after a fantastic April in which they posted a 14.0 positive comp.
Minyanville posts a good roundup of the May numbers, covering some retailers I didn’t cover here.
Interesting month and a good start to the Summer season in retail.
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Minyanville has posted a great roundup of all of the retail sales reports for April. They’ve got comp percentages for just about everyone and snarky comments for about half. I love it.
Retailers benefitted from the late Easter and most were really able to drive sales through the roof. Great numbers for some of the chains, not so great for others. Department and discount stores mainly show positive results: Federated down .8, Target up 10.4, Wal-mart up 6.8, Kohls up 13.4, Jc Penny up 2.6, Dillards up 10, Nordstrom up 7.3. Teen specialty retailers continue to show positive results: Abercrombie up another 17, Aeropostale up 8.4, American Eagle up 19, Pacsun up 14. The rest of the mall is hit and miss with Ann Taylor up 10.9, Children’s Place up 22, Claire’s Stores up 9 but Gap continues it’s downward trend, down 3 and Hot Topic was down 6.5.
Generally a pretty positive month but those with few suprises in retailers who didn’t beat their estimates or show a positive trend.
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