After reporting the worst June sales in three years, US retailers reported solid July sales results on Thursday, with most of them, including Limited Brands, Gap, Target, TJX, Ross Stores, Nordstrom, Saks, Kohl's and Macy's, reporting sales increases at established stores. However, sales were down at Wet Seal.
July sales are typically weak as shoppers take vacations or save for school shopping. However, retailers offered aggressive sales in order to clear shelves of summer items ahead of the back-to-school rush. The hottest July in more than 50 years also seems to have helped sales of summer fashions.
Looking ahead, lower gasoline prices and the back-to-school shopping season is expected to give a boost to sales in the month August, despite consumers reluctance to spend amid the economic uncertainty.
A report released from the Conference Board on Tuesday showed that consumer confidence showed an unexpected improvement in July, while it still remains at historically low levels. The U.S. consumer confidence index grew to 65.9 in July from an upwardly revised reading of 62.7 in June, 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 retailer's comparable store sales to increase 1.5 percent in July, much lower than the 4.2 percent rise in July last year.
Most of the retailers topped analysts' estimates, except Saks and Wet Seal.
Apparel retailer Limited Brands, Inc. (LTD), the operator of Victoria's Secret and Bath & Body Works chains, said its July comparable store sales rose 12 percent, reflecting strong growth at Bath & Body Works, along with continued strength of its Victoria's Secret Stores brand. The result exceeded Street expectations of a 6.0 percent growth. Meanwhile, net sales declined to $649.8 million from $660.4 million last year.
Gap, Inc.'s (GPS) July comparable sales increased 10 percent, including the associated comparable Online sales, amid positive sales across its brands. Street was looking for a 3.8 percent increase. Net sales grew 6 percent to $1.06 billion from $950 million a year ago.
Specialty retailer to young women, Wet Seal, Inc. (WTSLA) stated its comparable sales declined 15.6 percent in the month, while analysts estimate was for a 14.0 percent drop. Based on brands, the Foothill Ranch, California-based company's July comparable store sales decreased 15.9 percent at Wet Seal and 14.1 percent at Arden B. Net sales decreased 12.9 percent. E-commerce sales declined 5 percent.
Among discount retailers, Target Corp. (TGT) reported a 3.1 percent increase in comparable store sales for the month, topping analysts' expectations of a 2.7 percent growth. Total monthly net retail sales grew 3.2 percent to $4.84 billion from last year.
"Guests continue to respond to our innovative merchandising, remodel program and 5% REDcard Rewards, driving healthy increases in traffic and sales in a consumer environment that remains quite challenging," said Gregg Steinhafel, chairman, president and CEO of Target.
Off-price retailer TJX Cos., Inc. (TJX) reported that July comps were up 7 percent and total sales also increased 8 percent from last year to $1.8 billion. Analysts' were looking for a 5.0 percent growth in comps.
Another discount retailer Ross Stores, Inc. (ROST) said July same-store sales increased 7 percent, topping Street estimates for a growth of 4.5 percent. Total sales rose 12 percent to $709 million from a year ago.
Fashion specialty retailer Nordstrom, Inc. (JWN) reported a 0.9 percent growth in same-store sales for July, well above analysts' estimate for a 2.7 percent drop. Preliminary total retail sales also grew 1.1 percent to $1.00 billion from last year.
Among department store chains, Macy's (M) reported that same-store sales for July increased 4.1 percent over last year, higher than the 3.2 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 35.1 percent in July. Net sales also grew 5.1 percent.
"Despite some challenges from a sluggish macroeconomic environment and a temporary disruption of sales from the remodeling project at our Herald Square flagship store in New York City, the spring season met our expectations," Chairman, President and CEO Terry Lundgren noted.
Kohl's Corp. (KSS) reported a 1.7 percent increase in comparable sales for the month, while Street expected it to grow 0.6 percent. Total sales also grew 3.4 percent year-over-year to $1.16 billion.
Kevin Mansell, Kohl's chairman, president and chief executive officer, said, "We have made significant progress in improving inventory levels as we enter the Back-to-School season and believe we have the appropriate mix of both basics and fashion."
Fashion retail store chain, New York-based Saks, Inc. (SKS) reported that comparable store sales increased 3.5 percent in July, missing analysts expectations for the 4.0 percent growth. Total owned sales also grew 5.1 percent to $200.7 million from last year.
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