Sep 1, 2011
Sep 1, 2011
US Retailers' August sales up despite hurricane
Sep 1, 2011
Sep 1, 2011
Reuters) - Many top U.S. retailers reported better-than-expected August sales, withstanding Hurricane Irene and sagging consumer confidence.
Analysts expect the 24 retailers tracked by Thomson Reuters to post a 4.6 percent gain in August sales at stores open at least a year.
Most of the early same-store sales reports were better-than-expected, with Gap Inc (GPS.N) among the few retailers to miss Wall Street's forecasts.
August is the peak of back-to-school shopping, the second-most important period for U.S. retailers after the year-end holiday season. Sales in recent months have held up despite weak economic indicators, offering hope for August and the rest of the year, until the hurricane disrupted shopping along the East Coast during a key weekend.
"August sales were good up until Irene," said Keith Jelinek, director of AlixPartners' global retail practice. "The consumer realized they needed to spend for back-to-school, (and) there were promotions to drive the traffic and get the dollars."
The next two weeks will be critical, he said, as stores work to clear back-to-school items and make room for fall and winter merchandise.
Costco Wholesale Corp (COST.O), the largest U.S. warehouse club and the biggest retailer to report monthly same-store sales, posted a higher-than-expected 11 percent rise late on Wednesday.
"August was a period like many others for Costco throughout the economic recovery, showcasing an upper middle-income consumer continuing to be fully engaged in the process of saving where applicable," Wall Street Strategies analyst Brian Sozzi wrote in a research note.
Costco also said legendary co-founder Jim Sinegal plans to step down as CEO in January.
Limited Brands Inc (LTD.N) posted an 11 percent increase, surpassing analysts' forecast of 7.6 percent and its own call for a high-single-digit percentage rise.
IRENE CLOSES STORES
Macy's Inc (M.N), which closed more than 100 stores for all or part of last Saturday due to Irene, said the storm shaved about 1.5 percentage points from its August sales. Still, it posted a 5 percent gain, topping the analysts' estimate of 4.5 percent.
"We expect the hurricane's effect on sales will be substantially offset as we move through September and the third quarter," said Macy's Chief Executive Officer Terry Lundgren.
Target Corp (TGT.N) beat analysts' expectations of a 3.5 percent gain with a 4.1 percent increase.
While "the pace of the economic recovery is uneven and uncertain," Target had "solid results" in the back-to-school and back-to-college categories, said CEO Gregg Steinhafel.
The discount chain made moves such as putting dorm-sized refrigerators next to clothing in some stores to spur sales.
The monthly sales tally speaks to the strength of consumer spending, which accounts for roughly 70 percent of U.S. economic activity. Still, major retailers that saw brisk storm-related business, such as grocers, Home Depot Inc (HD.N) and Wal-Mart Stores Inc (WMT.N), do not report monthly results.
Discount chains and drugstores should show the biggest increases, according to Thomson Reuters, helped by hurricane-related sales of items like batteries and bottled water.
The storm's full sales impact will not be known until September's monthly report, since many retailers' August reporting periods ended on Saturday.
TJX Cos Inc (TJX.N) reported a 1 percent same-store sales gain, below the 2 percent forecast. The hurricane caused some weakness in August, but business rebounded solidly early in the September reporting period, leaving the off-price retailer comfortable with its quarterly sales and earnings forecasts.
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