Hot Weather Hurts Retail Sales

Elena
03 Aug, 2006
New York City

Same-store sales at the Seattle-based coffee chain Starbucks rose 6%. Nordstrom said same-store sales climbed 5.3%, ahead of analyst forecast of a 4.6% gain. Limited Brands also reported July same-store sales rise of 7%, beating estimates of 4.5%. Chico-s FAS said same-store sales rose 4.9% in July, but came in below the estimated figure of 5.6%.

[R]8:00AM Starbucks reported 16% profit rise and 6% same-store sales growth in Q3.[/R]
Starbucks ((SBUX)) reported it earned $145 million, or 18 cents a share in Q3, up from $125.5 million, or 16 cents, in the year-ago period, beating estimates of 17 cents a share. The 16% profit rise and 23% growth in revenue to $1.96 billion are due to new outlets, along with same-store sales gains. Same-store sales at the Seattle-based coffee chain rose 6%.

For the quarter, company-operated retail revenues rose 22% to $1.7 billion, largely on the back of 955 new stores and same-store sales growth. Starbucks added that its July revenue climbed 20% to $596 million on a same-store sales increase of 4%, vs. expectations of 6.4% and a 7% rise in July of 2005.

Starbucks forecasted earnings from 72 cents to 73 cents a share for the full year, up from 61 cents in fiscal 2005 and in-line with analyst estimates. Revenue growth of for the year will be about 20%, with same store sales up 3% to 7%. Starbucks also said it expects to open at least 2,000 net new stores on a global basis in fiscal 2006, an increase of 200 new stores than its previous target, leading it to boost its estimate of capital expenditures to $800 million from a previous $750 to $775 million.

Federated Department Stores ((FD)) posted same-store sales rise of 3.3%, slightly higher than forecasts of 3.2%. Total sales rose 61.3% to $998 million. For Q2 Federated said total sales rose 65.5% to about $6 billion. Federated expects same-store sales to increase by 3% to 4% in August.

Costco Wholesale ((COST)), warehouse-club store chain, reported that July sales rose 11%, while same-store sales rose 7%, slightly above estimate of a 6.8% rise.

Bebe Stores ((BEBE)), retailer, said same-store sales rose 10% in July, exceeding expectations of a 4% climb.

Limited Brands ((LTD)) said its July same-store sales rose 7%, beating estimates of 4.5%.

Mother’s Work ((MWRK)) said July same-store sales rose 3.9%, slightly beating analyst expectations of a 3.3% rise.

Chico-s FAS ((CHS)), retailer, said same-store sales rose 4.9% in July from the same period a year ago, but came in below the estimated figure of 5.6%.

Nordstrom ((JWN)), the pricey department-store retailer, said same-store sales climbed 5.3%, ahead of analyst forecast of a 4.6% gain.


[R]7:30AM Asian markets ended mixed ahead of U.S. and Japan economic data.[/R]
Asian markets ended mostly mixed on Thursday. The Nikkei 225 Index gained slightly, advancing 0.04% to close at 15470.37. Retailers, seafood industry stocks, and some electronics issues climbed. Fast Retailing added 1.4%, and Nippon Suisan Kaisha jumped 6.3%. Among electronics stocks, Canon nudged 0.9% while Sony shed 0.4%. Marine transport stocks offset gains, with Mitsui O.S.K. Lines plunging 1.6%.

Hong Kong shares closed slightly higher as a gain in HSBC supported the benchmark index. The Hang Seng Index advanced 0.1% to 17048.42, though gains were limited due to the concerns over the FOMC meeting. Other advancers included China Construction Bank which climbed 2.4%, Bank of Communications rising 1.9% and Bank of China gaining slightly 0.6%.

South Korea’s Composite Stock Price Index, or Kospi, fell 0.2% to 1292.05, as shares closed lower on institutional selling and caution ahead of the Fed meeting, with bank and telecom shares leading the decline. Taiwan markets closed slightly while digesting news of slow progress in cross-strait relations. Shares in China were flat for the second day running, as advances in banks were offset by concerns about the impact of a wave of new initial public offerings. Shares in Australia, New Zealand and Singapore climbed.


[R]6:30AM Europe markets lower on expectation of ECB rate call.[/R]
European markets were lower Thursday morning. London’s FTSE 100 shed 0.6% to 5,898.2, while Frankfurt’s Xetra Dax slipped 0.8% to 5,638.20 and in Paris, the CAC 40 dropped 0.6% to 4,997.17. Earnings were again the focal point in Europe, and the oil sector suffered as French producer Total, reporting a 16% rise in second-quarter net profit, fell just shy of market expectations and its shares fell 1.5%.

Finnish refiner Neste Oil lost 6.2% unexpectedly reporting weak second-quarter operating profit. Numico sank 2.8% as better-than-expected second-quarter earnings were overshadowed by sales that sank just shy of expectations and Danone, posting record first-half sales on Wednesday, shed 0.9% while Swiss group Nestle shed 1.9%.

Financial stocks gained as Société Générale, said net profit in the second quarter climbed nearly 38%, topping forecasts on strong growth in its investment banking operations. The shares climbed 0.2% and the UK’s Barclays too said that booming investment banking growth led to a better-than-forecast 37% rise in first-half profits lifting its shares 1.1%.

Oil prices rose slightly Thursday morning after a jump the day before on news that U.S. crude and gasoline inventories had fallen, and a tropical storm was gaining strength in the Caribbean. Light sweet crude for September delivery was up 4 cents to $75.85. London ICE Brent crude was trading 22 cents lower at $76.67 by 0915 GMT on Thursday.

Gold traded at $646.50 an ounce, down $2.20 an ounce from Wednesday. The euro lost ground against the U.S. dollar ahead of Thursday''s European Central Bank interest rate decision. The euro bought $1.2760 in early European trading, down from $1.2798 in New York late Wednesday. The British pound dropped to $1.8746 from $1.8779. The dollar also climbed to 114.76 Japanese yen from 114.55 yen.