Gap Inc. and Macy’s Inc. led U.S. retailers in posting July same-store sales that topped analysts’ estimates as promotions and warm weather boosted shopping traffic.
Sales at Gap, the biggest U.S. specialty-apparel retailer, climbed 10 percent, beating the average projection for a 3.8 percent gain from analysts surveyed by researcher Retail Metrics Inc., and sending its shares up by the most in almost four years. Macy’s, the owner of its namesake and Bloomingdale’s department stores, posted a 4.1 percent rise in same-store sales, topping the 2.5 percent average estimate.
Warm weather and higher consumer sentiment than a year ago likely supported summer sales in July, which typically is used to make way for back-to-school merchandise, Erika Maschmeyer, an analyst with Robert W. Baird & Co. in Chicago, wrote in a note before the report. Researcher ShopperTrak estimates U.S. retail traffic rose 7.4 percent in July.
“Despite a tough economic environment, consumers are showing they’re tired of the recessionary spending mentality,” Alden Lury, a retail strategist at Kurt Salmon in New York, said in a telephone interview. “Signs are pretty positive across the board, and that bodes well for the holidays.”
Same-store sales for the more than 20 companies tracked by Retail Metrics rose 4.4 percent last month, beating estimates for a 1.4 percent increase, the Swampscott, Massachusetts-based firm said in a report today. The gain, which follows a 0.3 percent increase in June, topped estimates by the widest margin since the U.S. exited the recession, with 84 percent of retailers reporting data that exceeded projections, the firm said.
Gap, based in San Francisco, soared 13 percent to $33.17 at the close in New York, the biggest gain for the shares since November 2008. The stock has rallied 79 percent this year.
Gap North America posted the best comparable July sales with a 13 percent jump, followed by the company’s Old Navy North America division’s 12 percent increase.
The retailer reported second-quarter sales rose 5.6 percent to $3.58 billion, topping the $3.52 billion average of analysts’ estimates gathered by Bloomberg. The company said in a statement that profit for the period was as much as 48 cents, exceeding analysts’ 38-cent average estimate.
Macy’s, based in Cincinnati, jumped 3.8 percent to $36.40. The company’s same-store sales rose 3 percent in the second quarter.
“We will continue to gain market share by delivering fresh fashion, quality merchandise and great value for our customers,” Chief Executive Officer Terry Lundgren said in a statement today.
Limited Brands Inc., the operator of the Victoria’s Secret lingerie chain, posted a 12 percent increase in same-store sales, topping the 6.2 percent average estimate. The Columbus, Ohio-based retailer rose 1.9 percent to $47.72.
Limited said in a statement that second-quarter profit excluding some items was as much as 48 cents a share, surpassing its forecast of as much as 45 cents and analysts’ 47-cent average estimate.
Ross Stores Inc. and TJX Cos. also reported July sales that beat estimates. Sales at both retailers of discounted designer merchandise rose 7 percent in the month. Analysts estimated gains of 4.3 percent at Pleasanton, California-based Ross and 5 percent at Framingham, Massachusetts-based TJX.
TJX said second-quarter profit was about 55 cents a share, topping analysts’ average estimate of 53 cents. The shares rose 2.6 percent to $45.01.
Wet Seal, the women’s apparel chain that fired its CEO last month, had the biggest same-store sales decline of the chains tracked by Retail Metrics, with a 16 percent drop. The company’s shares fell 1.1 percent to $2.74.
Most chains count locations open at least a year to tabulate same-store sales. The revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.