It was déjà vu all over again at retail in May as unseasonably chilly spring weather and higher gas prices were again blamed for keeping growth in check in most channels. Once again, it was the luxury retailers and teen retailers that fared best for the period, but family footwear was close behind thanks to strength at Shoe Carnival.
Based on a survey of 70 chain retailers conducted by the International Council of Shopping Centers, May chain store comp sales rose 2.9% versus the year-ago month, falling just short of ICSCs 3.0% forecast. Still, the gain was seen as healthy as it came on top of a very strong May last year that was helped by warmer weather and robust apparel sales.
From a channel perspective, the pattern of the last year continued as luxury retailers like Nordstrom and Neiman Marcus outpaced other department stores. The “Luxe” category saw a 7.1% increase for the month, an increase that was hurt by weakness at Saks Fifth Ave., while the total department store group only rose 1.3% for the period. (see chart page seven)
Warehouse clubs took a breather from their strong run as the weather played a role in stifling spring /summer merchandise sales. The same was evident at Wal-Mart and other discount stores with the exception of Target Stores, which outpaced the total market with a 5.1% increase for May.
But the results for the month appeared to surprise many analysts, as the resiliency of the U.S. consumer confounded the market-watchers yet again. A report earlier in the week also saw an unexpected rebound in consumer confidence in May.
“By and large, it was a solid month, despite adverse weather conditions. Consumers are starting to feel a little better,” said Ken Perkins, president of RetailMetrics LLC, in a report. “The daily humdrum of higher gasoline and oil prices abated in May, which contributed to the consumer psyche.”
“May sales continued to post a solid performance for luxury, teen and men's apparel retailers – which more than offset the overall drag from the coldest May in 22 years,” said Michael Niemira, ICSC's chief economist and director of research. “Clearly, non-automotive consumer demand remains robust.”
According to ICSC, footwear chains saw sales increase 4.6% for the period. The results no longer reflect Famous Footwear, which has gone to quarterly reporting.
Shoe Carnival easily outpaced the other footwear retailers, posting a 7.1% comp store sales gain for the month on top of a slightly positive month last year. Total sales for the period ended May 28 increased 11.5% to $48.0 million.
SCVL continues to capitalize on its focus on women. The womens business increased in the low-teens for the month, despite sluggish sales in the sandal category. Athletic, dress, and casual were also cited as strong performers. The mens business was up in low-singles and the childrens business, which includes childrens athletics, was up in high-single-digits. Mens and womens athletics were up mid-singles.
Total footwear comps were up 7.2% for the month and accessories comps were up in mid-single-digits. Exemplifying the impact of the cooler weather, the companys northern stores comped up 4.6% for the month, while the southern stores posted a 10% gain for the period.
Carnival said they have been “more aggressive” in their markdowns in the sandal product, but do not see it having a material impact on Q2 results, due to “strong sales and margins on other types of footwear.”
Based on the strength of May sales, SCVL now expects Q2 comp store sales to increase between 3% and 5%, a full point above previous expectations.
At DSW Shoe Warehouse, the family footwear division of Retail Ventures, Inc., total sales for May increased 14.5% to $100.5 million from $87.8 million last year. Comp sales for DSW inched up just 0.2% after an 8.1% increase last May.
The teen retailer gains were driven by Abercrombie & Fitch, American Eagle Outfitters, Wet Seal, and Zumiez, but strong sales here may have been a trade-off as Aeropostale and The Gap faltered and Pacific Sunwear continued its recent trend to weakness.
“When you're a retailer chasing that teen customer base, you're either on trend or you're not on trend,” said Britt Beemer, chairman of America's Research Group, in a published report. “When you are on trend, you see some good numbers.''
Pacific Sunwear moved back into positive territory in May, but comp store sales growth just made it into the positive range for the period after a 7.8% increase in May last year. Total company sales were up 11.3% to $80.7 million, but total company same-store sales increased just 0.4% for the month. PacSun division comps inched up 0.5%, while d.e.m.o. comps decreased 0.6% for the period.
The last two weeks of the month led to the positive results at PacSun for May as improved sales in swimwear, board shorts, t-shirts, shorts, and sneakers bolstered the continued strength in the denim category. The guys business was flat for the period, but girls comps were up in low-singles.
In the guys business, PacSun saw strength in denim, sneakers, and board shorts, offset a bit by weakness in shorts, short sleeve knits and wovens. The girls business was strongest in swimwear, board shorts, denim, and skirts, but was held back by weakness in sandals and accessories.
At d.e.m.o., it was all girls, as that sector of the business comped up in the low-20s. The guys business was down in the low-teens. Comps in the guys business did improve “significantly” in the last two weeks.
Zumiez reported its first monthly results after becoming a public company, results that may reflect strong momentum for the action sports retailer. Total net sales for the month increased 31.3% to $10.7 million, compared to $8.2 million in May last year. Comp store sales increased 10.2% for the past month, on top of a 6.9% gain in the year-ago period.
ZUMZ reported that the total number of transactions increased and the average transaction value was up in the mid-single-digits. Womens apparel was the strongest category with a double-digit comparable sales gain. Mens apparel, footwear, and accessories were also described as “strong” categories. Hardgoods was the weakest category with a slight comparable decrease.
The freshly-minted public company continued its string of double-digit gains after posting a 10.3% gain in February, a 14.2% jump in March, and an 11.1% increase in April.
The Buckle posted strong back-to-back May comps, with a an 8.6% increase for the period this year on top of an 8.3% increase in May last year. Total May sales increased 12.7% to $30.8 million.
>>> ICSC expects same-store sales to increase 3.0% to 4.0% for June.
>>> While analysts continue to wring their hands over the price of gasoline, the consumer appears to be taking higher prices in stride. They like to talk about how people will stay home this summer and forego that trip to the beach, but a little quick math kills their theory completely. A report last week indicated that average gas prices at the pump are just 6% higher this year than last. That means a thousand mile round-trip to the shore in a 20 mile per gallon mini-van will cost you an extra $6 to $10 bucks this year. So rent two fewer DVDs Einstein…
