(Includes additional results, stock prices.)
DOW JONES NEWSWIRES
Retailers reported another month of weak same-store sales in
August, but heavyweights Target Corp. (TGT), Kohl's Corp. (KSS) and
Gap Inc. (GPS) were among the bright spots with results topping
analysts' expectations.
Industrywide, same-store sales fell for a 12th straight month -
highlighting the woes retailers 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 car 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 during 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.
Target reported a smaller-than-expected 2.9% same-store sales
decline, with Chairman and Chief Executive Gregg Steinhafel saying
traffic was "essentially' flat, a meaningful improvement from
second-quarter trends. We're pleased with these results, which we
believe reflect the resilience of both our guests and our strategy
in a challenging environment."
Target's stock rose 2.4% premarket to $47.40.
Off-price apparel sellers TJX Cos.' (TJX) and Ross Stores Inc.
(ROST) have been posting some of the best results of late, and
analysts in recent days were sharply raising their August
estimates, said Retail Metrics.
TJX posted a same-store sales increase of 5%, while Ross Stores
reported a 6% gain, both results topping estimates.
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 decline for August. The company has seen big
declines for months as price-conscious shoppers instead go to
cheaper rivals like Aeropostale Inc. (ARO). Aeropostale had record
August results and a 9% increase. As such, it raised its earnings
forecast for the quarter by 2 cents a share. Shares rose 2.9% to
$39.70.
Another bright spot was Gap. It posted a much
smaller-than-expected 3% decline on a surprise 4% increase at the
long-struggling Old Navy chain. Its stock jumped 4.6% premarket to
$20.60. Department stores also continued their woes. Macy's Inc.
(M) posted an 8.1% same-store sales drop, while J.C. Penney Co.
(JCP) had a 7.9% decline. But Kohl's posted a surprise 0.2%
increase, which was aided by strength in the accessories and
women's departments. Shares added 2.1% to $52.97.
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