U.S. retailers including Gap Inc. and Macy’s Inc. posted August same-store sales that topped analysts’ estimates as consumers took advantage of back-to-school promotions.
Same-store sales at Gap, the biggest U.S. specialty-apparel retailer, climbed 9 percent, beating the average projection for a 5.5 percent gain from analysts surveyed by researcher Retail Metrics Inc. Macy’s, the department-store chain, posted a 5.1 increase in same-store sales, topping the 3.3 percent estimate.
Aggressive promotions and cooler temperatures in the Northeast drove sales and traffic in the second half of August, Adrienne Tennant, an analyst at Janney Montgomery Scott LLC in Washington, wrote in a note before the report. Same-store sales for the more than 20 companies tracked by Swampscott, Massachusetts-based Retail Metrics rose 2.7 percent, beating the average estimate for a 1.8 percent gain.
“Despite a lot of challenging macroeconomic fundamentals, the American consumer finds these opportunities where they just pick themselves up and they go out and shop, and that’s what we saw this month,” said Chris Donnelly, the Chicago-based global managing director of the retail practice at consultant Accenture Plc. “Most retailers are beating the estimates and most of their estimates were ambitious.”
Excluding drugstores, same-store sales in August rose 5.9 percent, beating estimates for a 4.2 percent increase, Swampscott, Massachusetts-based Retail Metrics said in a report today. Same-store sales increased 4.4 percent in July.
Most chains count locations open at least a year to tabulate same-store sales and some include online sales. The revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.
“We believe the healthy sales momentum we have seen this back-to-school season bodes well for the important (and fast-approaching) holiday season,” Randal Konik, a New York-based analyst at Jefferies Group Inc., wrote in a note today.
Gap, which posted the biggest increase in same-store sales at its Old Navy chain in North America, rose 2.7 percent to $36.11 at the close in New York, the highest closing price since Aug. 1, 2000. The San Francisco-based company’s shares have gained 95 percent this year.
Sales this fiscal year through Aug. 25 rose 6.2 percent to $8.26 billion, Gap said today in a statement.
Macy’s, the operator of its namesake and Bloomingdale’s department stores, fell 0.4 percent to $40.30. Online sales for Macy’s and Bloomingdale’s, which Macy’s includes in its same-store sales figure, surged 37 percent in the month, the Cincinnati-based company said in a statement today.
Nordstrom Inc. posted same-store sales that surged 21 percent, topping analysts’ estimates for an 11 percent increase, after moving more of its annual anniversary sale event into August. The shares lost 0.9 percent to $57.53.
Comparable-store sales at Bon-Ton Stores Inc., the recovering department-store company that has almost tripled its share price this year, rose 2.2 percent, exceeding analysts’ estimates of 1.3 percent. The York, Pennsylvania-based retailer rose 1.4 percent to $9.96.
Wet Seal Inc., the teen retailer that fired its chief executive officer last month, said same-store sales in August dropped 18 percent, compared with estimates for a 16 percent decline. The company, trying to turn around its operations, said in a statement today that the results were “in line with our expectations.”
Apparel sales are surging this back-to-school season, driven by colorful apparel, skinny denim and printed tops, Retail Metrics said today.
U.S. students typically start school in August or at the beginning of September after two to three months of summer vacation. Most back-to-school sales take place in August and September.
“Retailers were a lot more aggressive to get people in the store and get them spending quickly, and that clearly worked,” Accenture’s Donnelly said. “However, what’s interesting is that really across the board, people spent.”