2nd UPDATE: Retailers Generally Post Strong May Same-Store Sales
01 June 2012 - 12:09AM
Dow Jones News
Retailers recovered nicely from April's post-Easter slump,
delivering solid same-store sales for May, with Target Corp. (TGT),
Limited Brands Inc. (LTD) and Macy's Inc. (M) standing out, while
Kohl's Corp. (KSS) slumped.
Mother's Day falling in the middle of the month instead of its
start like last year helped May sales, as did a sequential decline
in gasoline prices month-over-month. Retailers are also showing
resiliency, since many are up against significant comparable-store
sales gains from last year.
The general tenor of the reports "shows an underlying strength
of the U.S. consumer," said Joel Bines, managing director of
AlixPartners. "We are back to a bit normal in retail where
consumption is at a relatively strong pace."
Target reported 4.4% growth, which was at the high end of the
company's expected range. Analysts were looking for 3.5%. Target
said larger average transaction sizes helped fuel the gain, with
food and apparel strong, while the retailer saw weakness in its
home department.
Limited Brands Inc. posted a 6% rise in same-store sales, when
4.7% was projected. The owner of Victoria's Secret and Bath &
Body Works has marked a string of analyst-topping results.
Macy's reported that same-store sales rose 4.2% in May, topping
analysts' expectations for a 4% gain. "The momentum in our business
continued in May, and came on top of a very strong month last
year," Chief Executive Terry Lundgren said, noting that growth came
from stores, online, and all geographic areas and categories.
Fellow department store Kohl's reported a 4.2% drop in
same-store sales when a 1.2% decline was projected, and said it
expected second-quarter same-store sales to be "modestly" down. "We
made some progress in building our inventory levels, but continue
to expect lower units to hinder our sales until the back-to-school
season," Chief Executive Kevin Mansell said.
Gap Inc. (GPS) also disappointed, reporting comparable-store
rose 2%, when analyst were looking for 3.1%. Nonetheless, Chief
Executive Glenn Murphy said he was "pleased with overall customer
response to summer products in May which helped us deliver positive
comparable sales for the company."
Nordstrom Inc. (JWN) posted a 5.3% rise in same-store sales,
when 4.7% was expected. Fellow luxury retailer Saks Inc. (SKS) said
comparable-store sales increased 4% when analysts were looking for
2.5%. Strong categories during the month at Saks included women's
contemporary apparel, women's shoes, fashion and fine jewelry,
cosmetics and fragrances and men's contemporary apparel.
Off-price retailer TJX Cos. (TJX) reported an 8% rise in
same-store sales when Wall Street expected 5.3%, and said it now
sees second-quarter earnings per share at the high end of its prior
range. Zumiez Inc. (ZUMZ) knocked it out of the park, posting a
13.7% jump in May same-store sales when analysts expected a 6.6%
rise. The seller of skateboarding, surfing and snowboarding related
apparel for young people said an increase in spending per
transaction played a key role in the rise as customers paid higher
prices.
The 18 retailers tracked by Thomson Reuters posted a 3.9% rise
in same-store sales for May when 3.6% was expected, according to
analysts it polled. The figure compares with a 5.8% rise last year
and a 2.2% gain in April. Retailers closed their books for May on
Saturday, with subsequent sales for the month to be folded into
their June same-store sales.
Costco Wholesale Corp. (COST) reported same-store U.S. sales
excluding gasoline rose 5%, beating expectations for 4.4%.
Stage Stores Inc. (SSI), which operates chains in generally
smaller locales in the U.S., saw its same-store sales jump 8%,
nearly quadruple what was expected, after no growth a year earlier.
The gain was the best for the month at Stage Stores in a
decade.
Some misses included Wet Seal Inc. (WTSLA), which marked an 8.8%
decline in comparable-store sales when an 8.3% drop was expected.
Softness in knit tops and screened tee shirts overshadowed growth
in several other categories, said Chief Executive Susan
McGalla.
"Through the remainder of the quarter, we will continue to shift
our assortment toward strong performing categories, including woven
tops, jeans, dresses and shoes, to better position Wet Seal for the
back-to-school season," McGalla said.
Fellow teen retailer Buckle Inc. (BKE), a heavy seller of jeans,
said comparable-store sales rose 0.2%. Analysts were expecting a
3.3% gain, making this the third month in a row the company has
missed analysts' projections.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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