Cooler average temperatures were the primary driver for better-than-expected sales in the five-week September selling period. The International Council of Shopping Centers cited data from Weather Trends International that indicated the month was the 25th coldest September in the last 112 years, a data point that was supported by the strong month experienced by retailers in the outerwear category, especially in the sporting goods channel. Having five Saturdays in the month didnt hurt either.
According to ICSC's Chain Store Sales Trends report, which was compiled from a survey of 57 retailers, chain store sales for the month increased 3.8% on a comparable store basis, about average to the year-to-date trend.
While department stores led the chain store results, Sports Executive Weekly suspects that the sporting goods sector would have figured strongly in the results as well if they were included in the ICSC survey. Based on data compiled by SportScanINFO, sporting goods stores saw total apparel and accessory sales increase in strong double-digits for September, including a strong performance in licensed apparel, while footwear sales improved in the mid-teens for the month on strong cleated and running sales. The group also benefited from less reliance on the declining classics category. Hardgoods sales increased in the low- to mid-teens for the five-week period. The same cant be said for the mall, where the athletic specialty guys continue to see sluggish results in athletic footwear, licensed apparel, and branded apparel. Family footwear, which is also missing from the ICSC report, saw athletic footwear sales dip in the mid-singles in September.
According to the ICSC survey, the department store sector, which saw comps rise 8.4% for the period, did even better in the luxury group, which posted an 11.3% same-store sales gain for the month, led by Nordstrom, which posted a 13.4% comp sales increase. Kohls led all department store results, reporting a 16.3% comp store sales gain for the period. The apparel specialty sector also saw the upside from stronger apparel sales, rising 8.4% for the month on a comp store basis, but would have seen comps up 8.9% when excluding the declines at Gap.
Action sports retailers are not in the ICSC data either, but those that report monthly results saw very different results as Pacific Sunwear and Zumiez continue to move in opposite directions.
Pacific Sunwear of California, Inc. reported total sales for the month of $118.4 million, which represents an increase of 4.2% over $113.7 million reported for the same month last year. For the company as a whole, same-store sales decreased 2.4%, with PacSun same-store sales dipping 1.2% and d.e.m.o. same-store sales decreasing 9.4% for the month.
In a recorded statement, management said that sales were strong in the Midwest and Texas, but were weak in Florida and California. At PacSun, the guys business was said to be up in the high-singles, but footwear continues to be a struggle as the category posted a mid-teens decrease. At d.e.m.o., girls was down in the low-double-digits, while guys was down in the mid-singles.
In other PSUN news, the companys CEO, Seth Johnson, resigned and lead director Sally Frame Kasaks took over in an interim role. As a result, Kasaks will step down temporarily from her position as lead director and from her committee positions, with board member Peter Starrett filling those roles for the time being. Johnsons departure will cause the company to take a one-time, pre-tax charge of approximately $1.1 million, or a penny per diluted share, in the third quarter. The company reiterated its guidance, excluding the charge, of diluted earnings per share in the range of 22 cents to 30 cents.
Zumiez Inc. continues to see positive momentum as the action sports retailer posted a 47.3% increase in total sales to $28.7 million from $19.5 million for same month last year. The company's comparable store sales were also up, increasing 14.9% for the five-week period on top of a 10.1% increase last year. Management attributed the sales growth to both new and comparable store sales gains, with increases in average unit retail as well as in-store transactions. Mens was named as the primary growth driver, but all departments were said to have comped positively.
It will be interesting to watch the dynamic between these two retailers as Zumiez begins to broaden its reach across the country with acquisitions and new doors. Specifically, the retailer is making a move into Texas after its Fast Forward acquisition, a region which PSUN said is performing well.
At the end of the month, the company had 230 stores open, with 158 included in the comp store base. ZUMZ remains on plan to open 42 new stores in 2006, not including the recent acquisition of Fast Forward.
The Buckle, Inc. followed Zumiez sales growth lead, posting a 12.0% increase to $50.0 million for the month, up from $44.7 million during the same month last year. Comparable store net sales increased 8.7% after last Septembers 1.4% decrease.
The weakest channels were discounters, where comps rose 2.6%, and wholesalers, which saw comps up 2.5% for the period. TJX led the discounters with a 9.0% comp sales gain and Target posted a 6.7% comp improvement.
ICSC estimated that October same-store chain sales will rise between 3.0% and 3.5%.