Retail Sales Rise as Warm Weather, Bargains Spur Buying
Retail Sales Rise in June
Andrew Harrer/Bloomberg
Sales at J.C. Penney climbed 4.5 percent in June, topping estimates.
Sales at J.C. Penney climbed 4.5 percent in June, topping estimates. Photographer: Andrew Harrer/Bloomberg
July 8 (Bloomberg) -- Joe Feldman, managing director at Telsey Advisory Group, talks with Bloomberg's Lori Rothman about the outlook for U.S. retail sales. Retailers reported sales gains in June as record-high temperatures on the East Coast pushed more shoppers into air-conditioned malls. (Source: Bloomberg)
July 8 (Bloomberg) -- Michael McNamara, vice president of research and analysis at MasterCard Advisors SpendingPulse, discusses sales by U.S. retailers in June and the impact of stock market and dollar on the sale of luxury items. U.S. retailers reported sales gains in June as record high temperatures on the East Coast pushed more shoppers into air-conditioned malls. McNamara speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)
July 8 (Bloomberg) -- Craig Johnson, president of Customer Growth Partners LLC, speaks about the outlook for U.S. retail sales. U.S. retailers reported sales gains in June, led by department stores, as record high temperatures on the East Coast pushed more shoppers into air-conditioned malls. Johnson talks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
U.S. retailers reported sales gains in June as record-high temperatures on the East Coast pushed more shoppers into air-conditioned malls.
Sales at stores open at least a year rose more than analysts projected at Nordstrom Inc., J.C. Penney Co. and Macy’s Inc., according to estimates compiled by Retail Metrics Inc. Gap Inc. and TJX Cos. fell short of predictions.
“Department stores benefited toward the end of the month from the excess heat across the country, particularly in the northeast but also out west,” said Ken Perkins, president of Retail Metrics. “Results were clearly mixed, and there was selective buying going on.”
July results may be similar, Perkins said, citing increased clearance sales in the first half and more hot weather across the U.S. While more people visited shopping centers, some of that traffic failed to translate into purchases, leading more than half of retailers to miss projections, Swampscott, Massachusetts-based Retail Metrics said.
Seattle-based Nordstrom fell 7 cents to $33.69 at 4 p.m. in New York Stock Exchange composite trading. Macy’s, based in Cincinnati, gained 53 cents to $18.44. Plano, Texas-based J.C. Penney climbed $1.46, or 6.7 percent, to $23.24. Gap and TJX each dropped more than 4 percent.
Confidence among U.S. consumers sank more than forecast in June and employment fell for the first time this year, reflecting a drop in federal census workers and a smaller-than- forecast gain in the private sector, the Labor Department said July 2. Sales of new homes plunged in May to a record low.
Consumer Concerns
“Economic growth and consumer spending are slowing at a troubling time for U.S. retailers who are staring at a long string of more difficult comparisons once they get by July’s easy 4.7 percent drop” a year earlier, Perkins said.
Sales at Nordstrom, the U.S. department-store chain with more than 100 locations, jumped 14.1 percent at stores open at least a year, more than the 9.1 percent average estimate from Retail Metrics. Sales at J.C. Penney, the third-largest U.S. department store, climbed 4.5 percent, compared with a 3.7 percent projection. Macy’s, the No. 2 department store, rose 6.5 percent, also topping estimates.
Retailers typically discount merchandise in June to clear inventory and make room for fall merchandise. Those clearance sales also helped spur purchases, Perkins said.
Memorial Day
A later Memorial Day also pushed more sales into June, according to Betty Chen, an analyst at Wedbush Securities in San Francisco. Memorial Day fell on May 31 this year, compared with May 25 a year ago. June’s sales include purchases starting from May 30, according to the National Retail Federation’s retail sales calendar.
Teen retailers Abercrombie & Fitch Co. and Zumiez Inc. also posted higher sales than analysts estimated. Sales at Abercrombie gained 9 percent compared to a 2.9 percent estimated rise. Zumiez sales jumped 10.9 percent, more than the 8.1 percent projection.
June sales at 30 chains rose 3.1 percent after a 2.7 percent gain in May, the 10th consecutive increase in monthly sales, Retail Metrics said today. Analysts estimated a 3.5 percent gain. Same-store sales are a key indicator of a retailer’s growth because they exclude results from new and closed locations.
Analysts pared June sales estimates throughout the month as economic data suggested the U.S. consumer faces mounting pressures, Perkins said. Analysts’ estimates called for a 3.8 percent gain at the start of June.
Discounters
Sales at discount chains including Costco Wholesale Corp., Target Corp. and BJ’s Wholesale Club Inc. trailed estimates. Perkins said consumers may be gravitating more toward the dollar stores for discounts.
Gap, operator of the eponymous clothing chain, said same- store sales were little changed from last year, falling short of the 3.7 percent estimated gain. Traffic was negative at all three of Gap’s brands, the San Francisco-based retailer said today on a conference call.
The monthly average gain in the first five months of the retail year that began Jan. 31 was 3.8 percent, the International Council of Shopping Centers trade group said. That was smaller than the 4 percent the trade group projected yesterday. It was still the largest gain since 2006. The ICSC uses a sample of more than 30 chains in its results.
Sales in 2010 will grow 3.5 percent to 4.5 percent at the more than 30 chains it tracks, the ICSC predicted in mid-May, faster than its January projection of 3 percent to 3.5 percent. Those sales dropped 1.6 percent last year.
To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net
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