US retailers reported August sales that showed some signs that the economic downturn was easing, but a late Labour Day holiday and muted consumer enthusiasm weighed on the key back-to-school season. Consumers still focused on essentials and saving money as they face uncertain job prospects, ravaged retirement savings and lower home values, a trend that could continue to hurt retailers in the all-important winter holiday season.
Six of the first 10 retailers tracked by Thomson Reuters missed analysts' same-store sales estimates for August. But results from Costco Wholesale Corp, the largest retailer that still reports monthly sales, beat analysts' estimates.
It posted only a 2 percent decline in sales at stores open at least a year, rather than the 5.7 percent drop analysts expected, according to Thomson Reuters data. Food and sundries were the best sellers, while consumers continued to hold back on discretionary spending, Costco said.
Limited Brands Inc, which owns Victoria's Secret, Bath & Body Works and other specialty chains, said same-store sales fell 4 percent, but bested the analysts' average estimate of a 5.9 percent decline. The company continued to see a drop off in clothing purchases through Victoria Secret direct, while swimwear and intimate apparel fared better than they had in the spring.
The sales view is distorted by the shift of the US Labor Day holiday - which falls on the first Monday in September - to September 7 in 2009 from September 1 in 2008. That means seven more pre-Labor Day selling days, including the entire holiday weekend, will be in the September sales reporting month this year.
Last year, the Saturday of Labour Day weekend fell in August. Children's Place Retail Stores Inc, which sells kids' clothes, reported a worse-than-expected 8 percent decline in August sales. Analysts were expecting same-store sales to decline 3.3 percent, according to Thomson Reuters data.
Also showing weakness on the apparel side was teen retailer Hot Topic Inc, which had an 8.1 percent decline, while analysts had called for a drop of 6.9 percent. Accessories and women's clothing were among the worst performers at the company's namesake stores. Drugstore chain Walgreen kicked off the results, reporting a mere 1.9 percent same-store sales increase on Wednesday, missing analysts' estimates, as consumers continued to cut back on general merchandise.
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