July Comps Soft, Retailers Lean on Back to School
Home & Textiles Today Staff -- Home Textiles Today, September 3, 2010
What's more, the numbers dipped since June, when all but two of the retailers tracked by HTT reported monthly comp increases.
Only one - Macy's Inc. - posted a high single digit increase at 7.3%, which the department store chain attributed to "the continued evolution of our core Macy's strategies, including My Macy's localization and centralization of the organization." Macy's also benefitted from the ongoing improved performance at Bloomingdale's, said Terry Lundgren, chairman, president and ceo.
All others on the plus side reported low single digit increases - Kohl's with 4.1%, Costco with 4.0%, BJ's with 2.8%, and Fred's with 2.7%. Three were tied for sixth place - Ross, Target and TJX Cos. - with 2.0% each.
With consumers spending cautiously, retailers are hinging their hopes on the recently embarked back-to-school/college season to pick up the sales pace in August.
Cincinnati-based Macy's said it has "planned for a successful back-to-school season and it is off to a great start" with the launch last week of Madonna's new Material Girl juniors brand.
At Framingham, Mass.-based TJX Companies, where comps have been strong for several months now, the off-price chain blamed its modest 2.0% gain - compared with 6.0% last July - in part its summer clearance activity for possibly having "sacrificed some top-line improvement."
Same-store sales % change
Costco Wholesale Corp.
BJ's Wholesale Club
Ross Stores Inc.
The TJX Companies Inc.
Stein Mart Inc.
J. C. Penney Company.
The Bon-Ton Stores Inc.
As Carol Meyrowitz, president and ceo, explained: "July is typically a clearance month as we transition from summer to back-to-school. We managed our inventories very tightly during the second quarter, which resulted in significantly less clearance merchandise in July."
Its direct competitor, 1,036- unit Pleasanton, Calif.-based Ross Stores Inc., suffered comps that were below its original 3% to 4% range forecast.
Still, home was singled out as one of the two strongest merchandise categories (the other being shoes). And as the back-to- school season kicked off at the end of July, sales picked up, said Michael Balmuth, vice chairman and ceo.
"While we believe that increased promotions at other retailers may have negatively impacted our business early in the month, we are encouraged that our sales strengthened in the latter part of July," he said.
With that in mind, Ross Stores said it now estimates that earnings per share for the 13 weeks ended July 31 will be $1.06 to $1.07, up from its previous projection of $1.00 to $1.02.
Menomonee Falls, Wis.- based Kohl's saw its comps decline month over month from 5.9% in June. Unchanged over the two months were the top comp sales performing merchandise categories, which again were footwear and men's.
Kevin Mansell, chairman, president and ceo, explained that the average unit retail and units per transaction continue to experience modest declines, "indicating that our customer remains cautious in her spending."
The 1,089-unit mid-tier department store chain's July sales were driven by increases in the number of transactions per store, consistent with our trends throughout 2010.
"We are well positioned from a merchandise and inventory perspective as we enter the back-to-school season," Mansell added.
JCPenney just missed the fl at mark, its comps dipping by 0.6% in July. While early reads on some of its new merchandise, namely kids' apparel brands, are "positive," the Plano, Texas-based mid-tier department store is bracing for delays from shoppers for the back-to-school selling season.
"The back-to-school selling season is later this year, with customers continuing their pattern of shopping closer to need, especially for traditional back-to-school items such as jeans and backpacks," JCP said.
Satisfied with its 2.0% comp increase was Minneapolis-based Target, especially considering its 1.7% increase in June. The discounter's July results were in line with expectations, noted Gregg Steinhafel, chairman, president and ceo.
"Store traffic and apparel sales were strong," even though Target continued to experience soft sales in electronics, video games, music and movies.
He added retail segment expenses "remain well-controlled, and profitability in our credit-card segment continues to be strong. Our team continues to focus on disciplined execution of our strategy in an uncertain environment."
Related Content By Author
Industry Related Content
H&TTtv Talks Outdoor Rugs