DOW JONES NEWSWIRES
Retailers posted a drop in July same-store sales, though many
companies' results beat analysts' downbeat expectations.
One exception was Buckle Inc. (BKE), the 2.8% increase of which
was well below analysts' views for a 10% jump. Shares were recently
down 11% at $27.50 on the news. The teen- and 20s-focused purveyor
of trendy tops and edgy jeans and footwear's 22-months of
double-digit growth ended in June.
Analysts cited numerous factors for their generally dour July
forecasts - including tax-holiday shifts, fewer clearance options
because of leaner inventories and cooler weather, which may have
affected seasonal sales. Analysts also said government subsidies
may have helped boost sales of new cars and homes, but they also
appear to have siphoned off enough discretionary money to have hurt
retailers' July sales.
Discounters, which have largely been holding up amid the
recession, reported largely lower results. Costco Wholesale Corp.
(COST) reported a 2% drop in the U.S. excluding gasoline and Target
Corp. (TGT) maintained its woes with a worse-than-expected 6.5%
decline. Chairman and Chief Executive Gregg Steinhafel said Target
was beginning to see "modestly improving risk trends" in its
credit-card segment, which has struggled amid rising delinquencies
and charge-offs.
Smaller Costco rival BJ's Wholesale Club Inc. (BJ) continued its
recent outperformance, reporting 1.8% growth excluding gasoline,
although that was lower than expected.
The worst-performing retailer was Abercrombie and Fitch Co.
(ANF), which posted another month of dour results with a 28%
same-store-sales drop. That was about what analysts were expecting,
according to Thomson Reuters. The company hasn't reported growth
since April 2008 and is increasingly shedding its no-markdown
mantra. Cheaper rival Aeropostale Inc. (ARO) maintained its recent
gains with a 6% increase in July, though that missed views.
TJX Cos.' (TJX) beat views with a 4% increase in same-store
sales, while Ross Stores Inc. (ROST) also bested expectations with
a 4% gain.
The industry's results were only the third without Wal-Mart
Stores Inc. (WMT) in 30 years. The world's largest retailer said in
May it would stop giving monthly sales data, following the lead of
other smaller peers in recent years. But Macy's Inc. (M) last fall
began giving such data again, saying the economic turmoil warranted
its investors getting a read on the company's performance more
often.
Expectations for the month came in at about a 5% decline, with
analysts saying consumers are continuing to trade down as
unemployment and gasoline prices rise.
Department stores, for more than a year the laggard among the
various retail segments, again broke the mold. Macy's 11% drop came
in worse than analysts' expectations, while J.C. Penney Co. (JCP)'s
12% drop also missed the analysts' views, but was better than the
company's own forecast. J.C. Penney boosted its fiscal
second-quarter outlook, saying it now expects a 1-cent loss. It had
forecast a loss of 8 cents to 12 cents a share.
Another department store, Nordstrom Inc. (JWN)'s same-store
sales fell 6.9%, not as bad as analysts feared. But Stage Stores
Inc. (SSI) missed analysts' expectations with a 12% drop.
On the apparel side, Children's Place Retail Stores Inc. (PLCE)
beat expectations with a 4% decline in same-store sales, while
Limited Brands Inc. (LTD) posted a 7% decrease, better than
analysts had anticipated.
Gap Inc. (GPS) bested estimates with an 8% drop. The company
also said it expects fiscal second-quarter earnings of 30 cents to
32 cents, above the current estimate of 28 cents from analysts
surveyed by Thomson Reuters.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com