June sales to be solid despite choppy beginning
NEW YORK (AP) — It looks like June wrapped up to be a solid month for merchants after a choppy start, according to analysts.
Rainy weather chilled shoppers' appetite for summer clothes for the first three weeks of the month, but analysts say that business improved in the last week leading up to July 4 as summery weather arrived. Record heat in Nevada and other parts of the West also perked up sales of lightweight clothes and other accessories.
June is a period when stores clear out summer merchandise to make room for goods for the back-to-school season, the second-biggest shopping season behind the winter holidays. Analysts say that because of a cooler-than-usual spring, stores were forced to discount a little more.
Only a small group of about 13 retailers report revenue at stores open at least a year on a monthly basis. The figures are considered a key indicator of a retailer's health. Kohl's Corp., Macy's Inc. and Target Corp. are among retailers that have recently stopped reporting.
But the results still offer a snapshot of consumer spending, which accounts for 70 percent of all economic activity.
"A late June surge drove pent-up demand as hot weather spurred pre-July 4th sales," Adrienne Tennant, an analyst at Janney Capital Markets, wrote in a report published Monday.
Overall, the International Council of Shopping Centers expect retailers collectively to report a revenue increase of anywhere from 3 percent to 3.5 percent when they release their monthly reports Thursday. That's in line with May's pace of 3.4 percent.
An improving job picture, better housing market and stock market rallies have all led to consumer confidence reaching its highest point in more than five years.
Among some of the retailers expected to report solid monthly figures is Gap Inc., which should report a 4 percent increase, fueled by its Old Navy chain, according to Thomson Reuters. The chain, which also operates stores under its namesake brand and Banana Republic, has seen resurging sales since last year as it has pushed brightly colored designs and new marketing campaigns.
Buckle Inc. is expected to record a 3 percent gain, according to analysts. However, Tennant noted that promotions at Buckle have been limited even in the highly promotional environment.
Teen chain Zumiez should see revenue at stores opened at least a year climb 2.4 percent, according to Thomson Reuters.
"We believe that record heat in the West towards the end of June has helped with sell-throughs," wrote Tennant.
Retailers are slated to report second quarter financial results next month, which should provide a deeper look into their business and consumer spending trends.
On Monday, Zumiez shares rose 43 cents to $29.74. Gap's shares rose 48 cents to $43.63. Buckle fell 6 cents to $54.05.