The arrival of summer prevailed over consumers' worries about rising oil prices last month, sending shoppers into stores and giving retailers...
NEW YORK — The arrival of summer prevailed over consumers’ worries about rising oil prices last month, sending shoppers into stores and giving retailers their best performance in more than a year.
As merchants released June sales figures yesterday, even recent laggards like Wal-Mart Stores had solid results.
The winners were from a range of retail sectors, including discounters such as Target, wholesale clubs such as Costco, department stores like Nordstrom and J.C. Penney and teen retailers such as Abercrombie & Fitch.
A handful of companies including TJX and Family Dollar had disappointing results, but they were the exceptions.
Most Read Stories
- Seattle judge won’t immediately release ‘Dreamer’ from detention center
- T-Mobile one-ups Verizon’s new unlimited data plan; 4Q results top forecasts
- Officials say damage to sewage plant in Discovery Park is catastrophic
- Sticker shock as much higher car-tab bills land in mailboxes
- Either invite us or not already | Dear Carolyn
Overall, “the final results were terrific,” said Ken Perkins, president of Retail Metrics , a research firm in Swampscott, Mass. “There was broad-based strength across all retail segments.”
He added, “Consumers clearly seemed to shrug off higher oil prices. And it didn’t seem to bother the low-income consumers.”
A series of bomb attacks rocked London yesterday, creating a possible source of anxiety for U.S. consumers. But Perkins said he foresees no big impact on American retailers as long as there are no other attacks.
Percentage change in June same-stores sales from the year-earlier period.
Retailer % chg.
& Fitch +38.0
Neiman Marcus +9.2
The International Council of Shopping Centers-UBS preliminary sales tally of 66 stores surged 5.3 percent in June, better than the 4.5 percent forecast. It was the industry’s best showing since May 2004, when the index was up 5.7 percent, according to Michael Niemira, chief economist at the International Council of Shopping Centers.
The tally is based on same-store sales, or sales at stores open at least a year. Those sales are considered the best indicator of a retailer’s strength.
June — the second most important month of the year in a retailer’s calendar after December — is when merchants clear out summer goods to make room for fall items. With clean inventories behind them, the nation’s stores should be able to make the transition to the back-to-school selling season more easily, Perkins said.
Niemira noted that the strong sales gain in June was helped in part by easier comparisons with June 2004, when the tally had a weaker 3.0 percent gain.
Still, the performance was a relief for retailers who had only modest increases the past three months, when lower-than-normal temperatures hurt demand for seasonal merchandise including clothing.
Although oil prices passed $60 a barrel for the first time last month, consumer confidence rose to better-than-expected levels as shoppers shrugged off energy’s advance and focused on an improving job market.
The latest report on unemployment claims, released by the Labor Department yesterday, indicated that the job market is indeed recovering.
While the number of new people signing up for unemployment benefits rose last week, it was mostly due to layoffs related to temporary shutdowns at auto plants as well as school closings.
A better measure is the four-week moving average of new jobless claims, which smooths out week-to-week fluctuations. That figure dropped last week to 320,500, a decrease of 3,500 from the week before.
That decline left the four-week moving average of new claims at its lowest level since early March.
Wal-Mart, whose lower-income shoppers had pulled back in recent months partly because of gas prices, reported a 4.5 percent increase in same-store sales. The figure was in line with the consensus from analysts polled by Thomson Financial.
The world’s largest retailer now expects same-store sales to be 3 to 5 percent for July, an encouraging sign given Wal-Mart has averaged a 2.8 percent pace for the January through May period.
Still, Wal-Mart said its earnings for the second quarter will be in line with forecasts given rising expenses.
Rival Target had a 9 percent gain in same-store sales, beating the 6.9 percent forecast. Total sales rose 16 percent. They were so strong that the discounter raised its second-quarter earnings forecast.
Costco announced a 9 percent increase in same-store sales in June, beating the 7.6 percent analyst forecast. Total sales rose 12 percent.
Kohl’s enjoyed a 14.4 percent sales surge, beating the 9.9 percent Wall Street forecast. Total sales rose 25.6 percent.
“We are very pleased with our results in June,” said CEO Larry Montgomery in a statement. “Our seasonal businesses experienced strong comparable-store-sales increases with the break of the weather.”
But TJX’s and Family Dollar’s results were disappointing. TJX announced a modest 3 percent same-store sales gain, less than the 5.6 percent Wall Street projected. Total sales rose 9 percent.
Family Dollar had a tepid 1.4 percent increase, missing the 2.5 percent estimate. Total sales rose 8.6 percent.
Department stores had their best performance since March 2004, according to Niemira.
Penney’s same-store sales within its department-store business rose 7.4 percent, beating the 4.2 percent forecast. Total sales rose 8.1 percent.
Federated Department Stores, which is acquiring May Department Stores in a deal expected to close in the third quarter, reported a better-than-expected 2.9 percent gain in same-store sales. Analysts forecast a 1.9 percent increase. Total sales rose 3.1 percent.
May eked out a 0.6 percent gain, better than the 1.3 percent decline analysts expected. Total sales rose 20.6 percent.
High-end stores continued their winning streak.
Nordstrom announced an 8.1 percent gain in same-store sales, better than the 6.6 percent forecast. Total sales rose 9.3 percent. And Neiman Marcus Group enjoyed a 9.2 percent same-store sales gain, surpassing the 6.8 percent estimate. Total sales rose 8.2 percent.
Apparel retailer Limited Brands posted same-store sales unchanged from a year ago. Analysts expected a 1.6 percent decline. Total sales rose 2.8 percent.
Even Gap, whose sales have languished, posted sales that were unchanged from a year ago, better than the 1.5 percent decline analysts forecast. Total sales rose 3 percent.
Abercrombie & Fitch’s same-store sales soared 38 percent, surpassing the 24.2 percent forecast. Total sales rose 52 percent.