U.S. Retail Sales Top Estimates on Tax Holidays, Discounts
U.S. Retailers’ Sales Beat Estimates on Tax Holidays
Jack Plunkett/Bloomberg
A family walks toward the entrance to the Kohl's store in Round Rock, Texas.
A family walks toward the entrance to the Kohl's store in Round Rock, Texas. Photographer: Jack Plunkett/Bloomberg
U.S. retailers reported August sales that beat analysts’ estimates as back-to-school discounts and tax holidays lured consumers to malls.
Sales at Limited Brands Inc., owner of the Victoria’s Secret chain, climbed 10 percent, more than the 7 percent average of analysts’ estimates compiled by Retail Metrics Inc. Sales at Kohl’s Corp., the department-store chain, rose 4.5 percent compared with a 3.2 percent projection. Sales at Gap Inc. were unchanged, beating estimates for a 0.5 percent drop.
Confidence among U.S. consumers increased more than forecast last month, with the Conference Board’s index advancing from a five-month low in July. Seventeen tax-free holidays during August probably attracted extra shoppers to the mall, where discounts were deeper than those in the previous month, said Ken Perkins, president of Retail Metrics.
“The tax-free holidays really gave a boost,” Perkins said today in an interview. “Retailers came out of the gates strong on the promotional front in the last week of July and that carried through for basically the entire month of August.”
Limited, based in Columbus, Ohio, gained $1.48 to $25.75 at 4:01 p.m. in New York Stock Exchange trading. Menomonee Falls, Wisconsin-based Kohl’s, the fourth-largest U.S. department-store chain, climbed 91 cents to $49.31 and San Francisco-based Gap, operator of Old Navy and Banana Republic chains, added 22 cents to $17.43.
The figures reported by the companies are so-called same- store sales, a key indicator of a retailer’s growth because they exclude results from new and closed locations.
Same-Store Results
Same-store sales at 30 chains probably rose 3.5 percent last month, Perkins said. The results won’t be final until Walgreen Co. reports sales tomorrow. Analysts estimated a gain of 2.8 percent, according to Retail Metrics, a Swampscott, Massachusetts-based research firm. They rose 3 percent in July.
In recent years, many U.S. states have waived sales taxes during the back-to-school period to help Americans buy new gear for their children.
The number of tax-free holidays in August rose from 13 a year earlier, Perkins said. Illinois, Florida, Maryland and Massachusetts added tax-free holidays, he said.
The housing market and high level of unemployment may put pressure on September’s same-store sales, Perkins said.
Purchases of new homes fell 12 percent in July to an annual pace of 276,000, the weakest since data collection began in 1963, figures from the Commerce Department showed.
U.S. unemployment in August may have risen to 9.6 percent, the first increase since May, according to the median estimate of economists surveyed by Bloomberg News. Those figures are scheduled to come out tomorrow.
To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net
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