DOW JONES NEWSWIRES
Retailers reported another month of weak same-store sales in
August, as back-to-school results came in worse than expected.
Industrywide, same-store sales fell for a 12th straight month -
highlighting the woes reatilers have been under as consumer
spending continues to decline. But with leaner inventories,
companies are hoping to avoid the markdowns of last year's holiday
season as sales then were even weaker than expected.
August results were also hurt by the late Labor Day holiday,
meaning some schools started sessions later than last year. Another
likely impact was the strong rebound in August U.S. auto sales on
the "Cash for Clunkers" program. It was seen as steering some
consumers away from retailers to showrooms.
Still, the sales decline was smaller than July's, and
comparisons will continue to get easier in the coming months. Weak
prior-year results in part helped cushion the August decline -
year-earlier same-store sales rose a scant 0.2%, according to
Thomson Reuters. That was the last increase for the industry.
Discounters had been holding their own amid the recession, but
even they have been showing strains of late. Costco Wholesale Corp.
(COST) reported flat same-store sales in the U.S. excluding
gasoline, while smaller warehouse-club rival BJ's Wholesale Club
Inc. (BJ) reported a 2.2% gain, another month of outpacing
peers.
Off-price apparel sellers TJX Cos. (TJX) has been posting some
of the best results of late, and analysts in recent days were
sharply raising their August estimates, said Retail Metrics. It
reported a higher-than-expected 5% gain.
Teen-apparel chains, especially Abercrombie & Fitch Co.
(ANF), were expected to be the weakest performers by sector.
Abercrombie again led the way down, posting a bigger-than-projected
29% same-store-sales slump for August. The company has seen big
declines for months as price-conscious shoppers instead go to
cheaper rivals like Aeropostale Inc. (ARO). It had record August
results and a 9% increase. As such, it raised its earnings forecast
for the quarter.
Another bright spot was Gap Inc. (GPS). It posted a much
smaller-than-expected 3% decline on a surprise 4% increase at the
long-struggling Old Navy chain.
Wal-Mart Stores Inc. (WMT) in May stopped reporting monthly
sales data.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com