The August retail landscape served up more of the same results for the month as soaring gasoline prices and hotter-than-normal weather stymied any significant growth. The market will need a real shift in the weather in September to overcome the impact of gas prices that are now roughly double that of last year, thanks to Hurricane Kristina. Still, analysts appeared to take an upbeat attitude toward the results that were expected to come in softer than reported.
Ken Perkins, principal at research firm Retail Metrics, said he was “perplexed” by the results, expecting that 50% of the retailers he tracks would have missed their estimates for the month. He had estimated a 3.7% gain for the month, but saw the results closer to 3.9% for the period.
“Part of the story is that retailers did have very easy comparisons from a year ago,” said Perkins. “But I'm still very impressed with the strong sales trends.”
According to the International Council of Shopping Centers, their survey of 67 chain stores revealed a 3.6% increase in comp sales versus the same month last year, and the exact same growth rate seen in July 2005. The August results, which were below the 4% ICSC forecast for the month, were on top of an anemic 1% gain in August last year.
ICSC cited data from SDI/Weather Trends that indicate that August 2005 was the eleventh warmest August in 111 years, while August last year was the fourth coolest over the same period. The weather obviously did little to fuel sales of sweaters and corduroy pants at department stores and kept average selling prices low as consumers opted for sandals and shorts instead of sneakers and jeans.
Gasoline prices actually had a positive impact in one area, helping push the Warehouse Club results up 7.8% for the month. Luxury Stores and Teen-Oriented formats were also atop the leader board for the month as the move to Luxe pushed that sector up 7.3% for the period and a surge in back-to-school apparel sales pushed the Teen sector up 10.1% for the month.
In the Luxury business, Neiman Marcus led the gainers with an 8.2% comp sales gain on top of a 14.7% increase last year. Nordstrom comps were up 8.0% on top of a 7.2% gain in August last year and Saks Fifth Avenue posted a 5.3% increase for the period.
Total Department Store comps were up just 2.0%.
ICSC reported that total Footwear Stores comps rose 4.1% in August.
Shoe Carnival shrugged off flat athletic results to post a solid gain for the month, reporting a 2.4% comp sales gain in August on top of a 1.5% increase for the same month last year. Total sales grew 7.3% to $81.8 million from $76.2 million in the year-ago period.
Mark Lemond, SCVL president and CEO, said the first half of the month was slow, but that sales “heated up” in the second half of August.
Carnival continues to capitalize on changes in its format, mix, and marketing focus to post high-single digit gains in both the womens and mens businesses. Both businesses undoubtedly got a lift from the fashion athletic business that is tracked under the retailers casual category. The mens and womens athletic business was flat for the month. The childrens business, which includes athletics, was up in low-singles. Total footwear was up 2.4% for the month and accessories was up in low-single-digits.
SCVL continued to see the shift in back-to-school sales play out in August as their southern stores posted a 7% comp increase for the month, a trend management sees boding well for the northern tier where schools tend to open a bit later. Northern store comps were down 1.7% for the month, but management said they expect to have a better picture of the trend after the second week of September.
DSW Inc. reported net sales for August increased 11.2% to $77.7 million from net sales of $69.9 million for the year-ago period. Comparable store sales decreased 0.2% for the period.
Payless ShoeSource pointed to positive consumer response to its BTS assortment as the retailer posted a 6.1% same-store sales gain for August. Total sales were up 3.9% to $218.8 million from $210.5 million during fiscal August of last year. Matt Rubel, PSS president and CEO, said they are focused on achieving low-single-digit positive comp sales going forward.
Zumiez Inc. mirrored the gains in the teen sector, posting a 9.4% comp sales increase for the month versus a 3.3% decline in the year-ago period. Total sales increased 25.1% to $24.7 million from $19.7 million for the year-ago period. Comps were actually up in double-digits in the first half of the month before settling into the high-single-digit range in the later part of the period.
Comp store transactions were up in mid-single-digits and the average unit retail was up in low-singles. Sales growth of accessories led all other categories, but ZUMZ did see positive results in mens, footwear, juniors, and hardgoods for the month.
Zumiez opened four stores in August for a total of 154 stores. They still see hitting their target of 35 new stores for the year.
The Buckle expects to see some impact from Katrina in September due to the continued closure of four stores. Five other stores were closed for two days, but are now reopened. August comp sales decreased 3.9% and total sales dipped 0.7% to $54.2 million for the period.
Pacific Sunwear of California, Inc. trailed the gains seen in the teen sector as their d.e.m.o. format suffers from continued declines in the mens business. Total company same-store sales increased 2.6% for the month, with a 3.1% comp sales decline at d.e.m.o. partially offsetting a 3.2% comp gain at the PacSun unit.
Total sales for the month were up 10.9% to $175.7 million. Total transactions per comp store were up in low-single-digits for August and the average ticket was up in low-singles, driven by a low-single-digit gain in average unit retail.
At the PacSun unit, comps on the guys side were up in mid-single-digits, driven by denim, tees, track jackets, polos, long-sleeve wovens, and accessories. Girls comps were up in mid-singles as well, fueled by gains in tees, tanks, swim, shorts, capris, skirts, sneakers, and accessories. Management said that comps were positive in denim and they had a “strong initial acceptance” of track jackets in the girls business.
At d.em.o., it was all girls again as a low-double-digit decrease in the guys business nearly offset a high-single-digit gain in girls. Comps were said to be positive in denim in both genders. The girls business was driven by strength in knit tops, capris, skirts, and footwear, while the guys business saw its best results in polos and shorts.
ICSC is forecasting a same-store sales increase of 3% to 3.5% for retail in September.
