September Retail Sales Bounce at Bottom

Mukesh Buch
11 Oct, 2009
New York City

September comparable sales managed to show a small gain on a calendar shift, delayed back-to-school sales and weak comparison to the previous year. Teenage retail related sales were soft in the month.

[R]1:00 PM New York – September comparable sales managed to show a small gain on a calendar shift, delayed back-to-school sales and weak comparison to the previous year. Teenage retail related sales were soft in the month.[/R]

After months of sales decline, comparable store sales showed a mild increase in September. Heavy discounting played a significant role in arresting sales fall.

Large and small retail chains managed to show a small rise in sales according to the latest data collected by Thomson Reuters and the International Council of Shopping Centers.

Calendar shift and easier comparison also played a role in the showing a better than expected results. Back-to-school season was pushed in the month from August and a year ago sales were dropping in double digits at most chains.

Teenage retailers reported weaker than expected sales despite the back-to-school sales. Sales at Abercrombie & Fitch, Hot Topic and American Apparel were soft.

Retailers are expected to report weak results until job market stabilizes and consumer spending recovers. Most retailers and analysts are focused on the upcoming Christmas season and the sales estimates run a gamut from a decline of 3% to flat sales.

High ticket items like designer clothes, jewelry and consumer durables are still expected to show a high single digit declines according to most people in the industry surveyed by 123jump.com.

However, for the month the retail sales increase of 0.6% was the first monthly increase from the previous year since July 2008.

BJ’s and Costco Same Store Sales Improve

BJ''s Wholesale Club, Inc ((BJ)) same store sales in August decreased 0.5%, including negative impact from sales of gasoline of 6.0%. Excluding gasoline sales, merchandise club comparable sales rose 5.5%.

Total sales in the month increased 4.1% from a year ago to $928.0 million.

Excluding sales of gasoline, traffic increased approximately 7% and the average transaction amount decreased by approximately 1% from last year. Sales of food increased 6% on strong sale of perishables. Sales of general merchandise rose approximately 5% compare to last year.

Costco Wholesale Corp ((COST)) reported September net sales increased 3% to $6.85 billion.

Net sales for the fiscal fourth quarter ended August 30, 2009 fell 3% to $21.89 billion compared to $22.63 billion quarter ended August 31, 2008. Net sales for fiscal year 2009 decreased 2% to $69.89 billion from $70.98 billion for fiscal year 2008 ended August 31, 2008.

Comparable sales in the month in the U.S. locations fell 1% and at international locations increased 6% and across the company rose 1%.

Excluding the gasoline and currency variations, comparable sales increased 3% in the month in the U.S. and rose 9% at international locations and increased 4% across the company.

Target Corporation ((TGT)) net retail sales in September increased 1.3% to $5.39 billion from a prior year month. The comparable sales in September fell 1.7%.

The company now expects third quarter EPS performance to exceed the current median FirstCall estimates of 43 cents a share.

Wal-Mart Stores no longer declares monthly same store sales but provides quarterly same store sales data.

Department Store Sales Decline at a Slower Pace

Macy''s, Inc ((M)) September same store sales fell 2.3%. Total sales declined 2.4% to $2.04 billion from $2.09 billion a year ago month.

For the year-to-date, total sales were $13.95 billion, a decrease of 8.5% from $15.24 billion from the year ago period. For the year-to-date same-store sales fell 8.2%.

Macy''s online sales in September increased 14.8% from a year ago and 13.3% for year so far.

J. C. Penney Company, Inc ((JCP)) reported comparable store sales decreased 1.4% for the five week period ended October 3 compared to a decline of 12.4% from a year ago month. Total sales in September declined 0.6%.

The company now expects October comparable store sales to decrease between 5% and 8% compared to 13.0% decreased in the month a year ago.

On the back of better than expected last two months performance, management now expects third quarter earnings $0.03 to $0.10 per share compared to previous guidance of a loss of $0.05 to earnings of $0.05 per share.

Kohl’s Corporation ((KSS)) reported total sales for the five-week period ended October 03, 2009 increased 9.6% to $1,464 million from a year ago. On a comparable basis same store sales increased 5.5% to in the month.

Total sales for the year to-date rose 2.8% to $10,223 million and on a comparable store basis, sales for the year decreased 1.7%.

The company revised third quarter earnings guidance from $0.40 to $0.44 per diluted share to $0.52 to $0.54 per diluted share.

Luxury Sales Remain Weak

Dillard''s, Inc ((DDS)) reported September sales declined 9% to $519 million compared to a year ago period. Comparable same store sales fell 6%.

For the thirty-five weeks ended October 3, sales decreased 14% to $3.73 billion from a year ago period. For the period, comparable same store sales declined 12%.

Saks Inc. ((SKS)) September sales decreased 10.2% to $242.2 million compared to $269.6 million in the month last year. Comparable store sales fell 11.6% for the month.

For the year-to-date ended October 3 total sales declined 19.7% to $1,573.9 million compared to $1,959.3 million in the prior-year period. Comparable same store sales decreased 20.6% for the fiscal year.

Nordstrom, Inc. ((JWN)) September sales increased 0.3% to $720 million from $718 million in the month a year ago. Same store sales fell 2.4% in the month.

Preliminary year-to-date sales decreased 6.1% to $5.11 billion compared to $5.44 billion in fiscal 2008. For the year-to-date same store sales decreased 9.8%.

Discounts Generate Mixed Sales at Teenage Retailers

Aeropostale, Inc. ((ARO)) net sales for September increased 28% to $187.3 million from $146.7 million in the month a year ago. Same store sales increased 19% for the month matching the sales rise in the month a year ago.

Year-to-date total net sales increased 21% to $1.29 billion from $1.07 billion in the year ago period. Year-to-date same store sales increased 12% compared to increase of 10% in the period of year ago.

Based on the better-than-expected results, the company expects to achieve net earnings for third quarter in the range $0.84 to $0.85 per diluted share compared to previous guidance of $0.78 to $0.80 per share. The company earned 63 cents a share in the second quarter a year ago.

American Eagle Outfitters, Inc ((AEO)) September sales increased 7% to $246.0 million from $229.2 million in the month a year ago.

Comparable same store sales were flat for the month compared to a declined of 6% in the month a year ago.

Total year-to-date sales in the thirty five week period decreased 3% to $1.82 billion compared to $1.88 billion in the year ago period. Comparable same stores sales decreased 8% for the year compared to the same period last year.

Management now expects third quarter earnings per share to be 24 cent to 26 cent per diluted share.

Abercrombie & Fitch Co. ((ANF)) reported net sales in September fell 10% to $248.2 million from $275.4 million prior month period. Comparable store sales decreased 18%. September direct-to-consumer total net sales increased 9% to $22.8 million from a year ago month.

Year-to-date sales decreased 22% to $1.82 billion from $2.33 billion in the year ago period. Comparable year-to-date sales fell 28%. For the year-to-date direct-to-consumer net sales decreased 12% to $139.6 million.

The Buckle, Inc. ((BKE)) comparable sales in the months increased 5.1% from a year ago.

Net sales in the month increased 10.1% to $80.1 million from net sales of $72.8 million for the same period of year ago.

Comparable sales in the year-to-date thirty five week period ended October 3 increased 10.4% from the period a year ago. Net sales in the period increased 16% to $577.2 million from net sales of $480.4 million for the prior year period.

The Cato Corporation ((CTR)) sales in the five-week period ending in September increased 8% to $70 million compared to the period a year ago. Comparable store sales for the month rose 6%.

Sales for the thirty five weeks increased 3% to $592.5 million from $577.1 million for the period of year ago. Year-to-date comparable store sales increased 1% compared to the prior year.

The Children’s Place Retail Stores, Inc ((PLCE)) net sales in five-week period ending on October 3 decreased 9% to $174.7 million from $160.7 million a year ago. Comparable store include online sales for September increased 4% compared to 1% decrease in the month year ago.

Comparable store sales for September in the U.S. rose 2%, in Canada decreased 1% and online sales rose 54%. The Company has opened one store in September.

The Gap, Inc ((GPS)) net sales declined 1% to $1.33 billion for the five-week period ended on October 3 compared with net sales of $1.34 billion for the same period a year ago.

The comparable store sales for September decreased 1% compared to fall of 11% in the prior year month.

Comparable store sales at Gap North America locations declined 8%, at Banana Republic North America fell 12%, at Old Navy North America Increased 13% and at international locations fell 4%.

For the year-to-date net sales decreased 6% to $8.82 billion compared to $9.36 billion compared to the prior year. Comparable store sales for year-to-date decreased 6% compared to a decrease of 10% in the last year.

Hot Topic, Inc ((HOTT)) comparable sales decreased 6.0% for five weeks period ended October 3, 2009. Net sales decreased 5.4% to $45.1 million compared to same period of year ago.

Destination Maternity Corp, formerly Mothers Work, Inc. ((DEST)) net sales in September decreased 5.1% to $41.5 million from $43.7 million a year ago. Comparable store sales decreased 1.3% in the period compared to prior year month.

Limited Brands, Inc. ((LTD)) comparable store sales rose 1% and net sales fell $654.8 million for the five weeks ended October 3 compared to $673.4 million in the month of year ago.

The company reported for the thirty five week comparable store sales decreased 7% and net sales fell $5 billion.

Stein Mart, Inc ((SMRT)) comparable store sales in September fell 5.4%. Total sales fell 9% from a year ago month to $101.9 million.

Stage Stores, Inc. ((SSI)) net sales in five-week period ending October 3 decreased 2.4% to $113 million from $115 million a year ago. Comparable store sales for August decreased 5.6% compared to 13.6% increase in the month year ago.

For the year-to-date comparable store sales fell 9.3% to $899 million from $961 million from year ago.

Discount Apparel Sales Lead Gainers

The TJX Companies, Inc ((TJX)) September sales increased 8% to $1.8 billion.

For the thirty five week period to October 3 sales increased 4% to $12.6 billion from a year ago. Comparable store sales for five-week period ended October 3 rose 7% and for thirty five week period comparable sales increased 4% from year ago.

Ross Stores, Inc ((ROST)) September sales increased 12% to $629 million compared to $561 million a year ago. Same store sales rose 8% in the month.

For the thirty-five weeks ended October 3 sales increased 9% to $4.65 billion from $4.26 billion in six months ended October 4 a year ago. Comparable store sales increased 4%.

The company now expects third quarter earnings for period ending October in the range of $0.75 to $0.77 per share compared to previous earnings guidance of $0.57 to $0.63 a share.

Walgreen Comparable Sales Rise

Walgreen Company ((WAG)) reported September sales increased 10.3% to $5.35 billion from $4.85 billion a year ago period. Comparable same stores sales increased 5.3% and sales at front-end of the stores rose 2.0%.

Total pharmacy sales increased 11.2% while comparable pharmacy sales increased 7.0% in the month. Comparable pharmacy sales were positively impacted by 2.4 percentage points due to seasonal flu shots and negatively impacted by 2.3 percentage points due to generic drug introductions in the last 12 months. Total prescriptions filled at comparable stores increased 12%.

Calendar year-to-date sales increased 7.4% to $47.62 billion from $44.34 billion in 2008.

Walgreens opened 48 new drugstores during September, including 6 relocations.