Retailers Looking At Poor June Sales After Soggy,Chilly Month
July 07 2009 - 5:10PM
Dow Jones News
June is looking like a washout for retailers, with cold and
rainy weather in many parts of the country keeping consumers
homebound.
Retailers on Thursday are expected to post a 4.8% drop in
same-store-sales for last month, with department stores and some
apparel retailers doing most poorly, while discounters appeared to
see some resurgence in interest.
June's drop would mark the 10th straight month of
same-store-sales declines, the longest since Thomson Reuters began
collecting the data in 2000.
The figures do not include Wal-Mart Stores Inc. (WMT), which
stopped reporting same-store sales in May.
"Retailers are still hurting, and in fact consumers are showing
signs of heading down the retail chain in a greater way again,"
said Jharonne Martis, retail analyst at Thomson Reuters.
June's expected same-store-sales drop is the same as May's 4.8%
decline, but consumers' buying habits are showing some shift.
May saw some improvement in demand for merchandise from
department stores and apparel retailers, as they posted lower drops
than in some prior months. Any momentum vanished in June as colder
weather during the month hurt demand for shorts, bathing suits and
other summer apparel.
On the lowest end, though, discounters saw their sales declines
mitigate a bit as consumers again became wary in the face of
unemployment continuing to ratchet up and gas prices rising.
"People are primarily buying non-discretionary items again,"
Martis said.
Retailers also did not benefit from the tax rebate checks that
consumers spent in June 2008.
For June, apparel retailers are expected to see a 10.6% drop in
comparable-store-sales, worse than their year-to-date average 9.3%
decline. Among apparel retailers, Abercrombie & Fitch Inc.
(ANF), despite finally adopting a promotional posture, is expected
to see its comps fall 26.6% for June.
Department stores are looking at a 9.1% decline, led by
upper-end Saks Inc. (SKS), off 11.8%; and Nordstrom Inc. (JWN) down
11.4%. Kohl's Corp. (KSS), on the lower end of the group, is seen
as doing the best among department stores, with a 6.8% decline.
Discounters are looking at a 5.8% decline, with Target Inc.
(TGT) showing a 5.6% drop and Costco Wholesale Corp. (COST) off 6%.
BJ's Wholesale Club Inc. (BJ) is in the position of showing the
worst drop among discounters, with an overall 7.2% decline. But
when the impact from gas sales are backed out, analyst see BJ's
same-store-sales rising 3%.
The only other gains of the 28 retailers that Thomson Reuters
tracks are by three in the apparel group.
Buckle Inc. (BKE) is projected to see sales rise 12.2% despite a
difficult comparison to last June, when sales rose 28.9%. Buckle is
viewed by analysts as being very on target when it comes to teen
fashion and also offers varying prices for its merchandise.
Aeropostale Inc. (ARO) is pegged to see a 10.3% rise, as it
continues to use its fashion sense and low prices to takes business
away competitors like Abercrombie & Fitch.
Ross Stores Inc. (ROST), another discount apparel retailer, is
seen showing a 0.6% rise in June same-store-sales.
July may also be a struggle for retailers. Tax-free holiday
periods that many states held n July last year are being shifted
into August this year.
- By Karen Talley, Dow Jones Newswires, 212-416-2196;
karen.talley@dowjones.com