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(Updates with closing share prices in seventh paragraph.)
Sept. 1 (Bloomberg) -- Retailers including Limited Brands Inc. and Wet Seal Inc. reported August sales that beat analysts’ estimates, helped by back-to-school shopping, while closings forced by Hurricane Irene hurt department-store traffic.
Limited, operator of the Victoria’s Secret chain, posted an 11 percent gain in same-store sales, topping the 8 percent average estimate of analysts surveyed by Retail Metrics Inc. Sales at Wet Seal, the young women’s clothing retailer, rose 5.5 percent, beating the average estimate for a 4.7 percent gain.
Macy’s Inc., Saks Inc. and other retailers closed locations along the East Coast as Hurricane Irene flooded roads, shut airports and cut power to more than 8 million homes and businesses. The storm struck the weekend before the Labor Day holiday, traditionally a key time for back-to-school shopping, Retail Metrics said in the report.
“Overall, back-to-school sales are strong,” Jennifer Davis, an analyst at Lazard Capital Markets in New York, said in an interview. “But it’s difficult for department stores to recover from that closure, especially during such a key shopping weekend.”
Same-store sales at the 24 retailers tracked by Swampscott, Massachusetts-based Retail Metrics rose 5.5 percent, topping analysts’ estimates for a 5 percent gain.
Saks posted same-store sales that rose 6.1 percent, trailing the average estimate for an 8 percent gain. Sales at J.C. Penney Co. Inc., the Plano, Texas-based retailer, fell 1.9 percent, compared with an estimated gain of 1.3 percent. Macy’s sales climbed 5 percent, topping the 4.3 percent average estimate.
Limited, based in Columbus, Ohio, dropped 67 cents to $37.07 at 4 p.m. in New York Stock Exchange composite trading. Foothill Ranch, California-based Wet Seal fell 12 cents to $4.92. Cincinnati-based Macy’s rose 54 cents to $26.49, while New York-based Saks dropped 18 cents to $9.50. J.C. Penney fell 37 cents to $26.26.
Most chains count locations open at least a year to tabulate same-store sales. This revenue is a key indicator of a retailer’s growth because new and closed sites are excluded.
Gap Inc. and Kohl’s Corp. were hard-hit in August. Sales at Gap, the largest U.S. apparel chain, dropped 6 percent, compared with analysts’ estimates of a 3.9 percent decline. Kohl’s sales fell 1.9 percent, compared with expectations for a 1.7 percent gain.
Gap Still Struggling
San Francisco-based Gap is still struggling to “find its footing” and release fashions that resonate with its audience, Retail Metrics said in a report today. Kohl’s, based in Menomonee Falls, Wisconsin, was hurt by “uninspiring” back-to- school selections, Retail Metrics said.
Confidence among U.S. consumers plunged to the lowest in more than two years in August as Americans’ outlooks for employment, incomes and business conditions soured. The Conference Board’s index slumped to 44.5, the weakest since April 2009, from a revised 59.2 reading in July, figures from the New York-based private research group showed last month.
The U.S. unemployment rate was 9.1 percent in July, and has been 9 percent or higher for 25 of the past 27 months.
--Editors: Robin Ajello, Kevin Orland
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