--Retailers' June same-store sales rise 5.9%
--Gap has another strong month
--Costco same-store sales top expectations
(Updates with final same-store sales figure and results from
Gap.)
By Anna Prior
Retailers' sales continued to heat up in June amid improving
weather and discounting as the chains looked to clear through
spring merchandise and prepare for the impending back-to-school
season.
While general-merchandise retailers, like Costco Wholesale Corp.
(COST) and Fred's Inc. (FRED), reported strong results for June,
some specialty retailers, like L Brands Inc. (LTD) and Zumiez Inc.
(ZUMZ), missed market expectations, suggesting overall consumer
spending looks to be improving, but shoppers may be holding back on
discretionary purchases.
Historically, sentiment among consumers isn't quite where it has
been but "we're seeing positive trends that then translates into
better sales," said Kurt Kendall, a retail strategist at consulting
firm Kurt Salmon.
One standout was Gap Inc. (GPS), which continued to record
strong sales. After the market closed Thursday, the company
reported same-store sales growth of 7% in June, topping
expectations for 4.7% growth. Gap stores posted a 5% rise when 6.3%
growth was expected, while Banana Republic's same-store sales
declined 1%, compared to expectations for 0.7% growth. Old Navy
recorded 13% growth, well ahead of expectations for 5.4%
growth.
The nine retailers tracked by Thomson Reuters reported 5.9%
growth in same-store sales, or sales at stores open more than a
year. This compares with analysts' expectations for 4.8% growth,
and 2.6% growth a year earlier.
A number of companies, including the major department stores,
have stopped reporting monthly results over the past year.
For its part, Costco reported June same-store sales grew 6%,
excluding gas, topping expectations for 5.3% growth. Top-performing
regions included Texas, the Southeast and the Midwest, the company
said. By category, softlines recorded growth in the low
double-digit percentage range, with the strongest results in the
category coming from items including small appliances, housewares
and apparel. The lawn and garden, health and beauty, and automotive
categories also reported growth.
Fred's reported 4.5% growth in June same-store sales, surpassing
the 1.1% rise that was expected. The company said results exceeded
its own expectations and reflected increased customer traffic and
higher transaction amounts. Results also benefited from a calendar
shift earlier in the month, Chief Executive Bruce A. Efird
said.
However, L Brands--formerly Limited Brands--posted flat
same-store sales last month, compared with expectations for 2%
growth. Still, the company said its merchandise-margin rate was
higher compared with a year earlier and above its own
expectations.
Of L Brands' units, Bath & Body Works reported 2% growth in
same-store sales, below expectations for 3.4% growth, and reported
strength in its signature collection, home fragrance and soap and
sanitizer businesses. Meanwhile, Victoria's Secret recorded a 1%
decline in same-store sales, missing expectations for a 1.4%
increase. The company said the decrease was primarily the result of
lower clearance sales as Victoria's Secret entered its semi-annual
sale period with fewer clearance units. And La Senza reported flat
same-store sales for the month, when 2.8% growth was expected.
Among teen retailers, Zumiez posted a 1% rise in same-store
sales, below expectations for 2% growth, while Buckle Inc. (BKE)
recorded a 3.4% increase in same-store sales, just shy of
expectations for 3.7% growth.
Write to Anna Prior at anna.prior@dowjones.com
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