US retailers reported solid August sales results on Thursday, with most of them, including Limited Brands, Gap, Target, TJX, Ross Stores, Nordstrom, Kohl's and Macy's, reporting increased sales at established stores. However, sales were down at Wet Seal.
August is a healthy month for U.S. retailers as parents and students line up at stores for back-to-school and back-to-college shopping. It is the second-biggest selling period for retailers after the Christmas holiday season.
Looking ahead, September could be hit by the consumers' reluctance to spend amid the economic uncertainty with rising gas prices and falling consumer confidence. Sales could then get a boost only on Black Friday and later on. Consumer spending accounts for more than 70 percent of the U.S. economic activity.
A report released from the Conference Board on Tuesday showed that consumer confidence substantially deteriorated in the month of August, falling to a nine-month low and remained at historically low levels. The U.S. consumer confidence index dropped to 60.6 in August from a downwardly revised reading of 65.4 in July, beating expectations of a 61.5 reading.
Comparable-store sales or Comps is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year. Analysts polled by Thomson Reuters expected the retailers' Comps to increase 4.1 percent in August, lower than the 4.9 percent rise in August last year.
Most of the retailers topped analysts' estimates, except Wet Seal.
Apparel retailer Limited Brands, Inc. (LTD: Quote), the operator of Victoria's Secret and Bath & Body Works chains, said its August comparable-store sales rose 8 percent, reflecting continued strength of its Victoria's Secret Stores brand. The result exceeded Street expectations of a 4.2 percent growth. Meanwhile, net sales declined to $665.6 million from $702.4 million last year.
Gap, Inc.'s (GPS: Quote) August comparable sales increased 9 percent, including the associated comparable Online sales, amid positive sales across its brands, except international. The Street was looking for a 5.4 percent increase. Net sales grew 9 percent to $1.20 billion from a year ago.
Specialty retailer to young women, Wet Seal, Inc. (WTSLA) stated its comparable sales declined 18.3 percent in the month, while analysts estimated 17.0 percent drop. Based on brands, the Foothill Ranch, California-based company's August comparable store sales decreased 18.5 percent at Wet Seal and 16.3 percent at Arden B. Net sales decreased 15.9 percent. E-commerce sales edged up 0.3 percent.
Among discount retailers, Target Corp. (TGT: Quote) reported a 4.2 percent increase in comparable store sales for the month, topping analysts' expectations of a 3.1 percent growth. Total monthly net retail sales grew 4.7 percent to $5.54 billion from last year.
"Sales were stronger in the second half of the month, as guests responded to Target's broad assortment and compelling value for their back-to-school and back-to-college shopping," said Gregg Steinhafel, Target's chief executive.
Off-price retailer TJX Cos., Inc. (TJX: Quote) reported that August Comps were up 8 percent and total sales also increased 10 percent from last year to $1.9 billion. Analysts' were looking for a 6.3 percent growth in comps.
"Customer traffic drove the comp sales increase across our divisions in the U.S., Canada and Europe, which we believe is a great indicator that our value proposition continues to resonate with consumers," TJX CEO Carol Meyrowitz noted.
Another discount retailer Ross Stores, Inc. (ROST: Quote) said August same-store sales increased 8 percent, topping Street estimates for a growth of 5.8 percent. Total sales rose 13 percent to $747 million from a year ago.
"Our ability to deliver a wide array of name brand bargains for back-to-school shoppers drove healthy traffic to our stores during the month. Looking ahead, we continue to forecast same store sales gains of 2% to 3% for September and 3% to 4% for October," CEO Michael Balmuth stated.
Fashion specialty retailer Nordstrom, Inc. (JWN: Quote) reported a 21 percent growth in same-store sales for August, well above analysts' estimate for a 11.1 percent rise. Preliminary total retail sales also grew 25.2 percent to $866 million from last year. The strong sales results reflected eight days of Nordstrom's Anniversary Sale event falling in August 2012 compared to one day only in 2011.
Among department store chains, Macy's (M: Quote) announced that same-store sales for August increased 5.1 percent over last year, higher than the 3.6 percent growth analysts were expecting.
Meanwhile, online sales, which is included in the same-store sales calculation, at macys.com and bloomingdales.com combined, increased 37.4 percent in August. Net sales also grew 5.7 percent.
Kohl's Corp. (KSS: Quote) reported a 3.4 percent increase in comparable sales for the month, while Street expected it to grow 1.9 percent. Total sales also grew 5.3 percent year-over-year to $1.49 billion.
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by RTT Staff Writer
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