US retailers' May 2014 sales roundup
Better weather and stepped up promotions helped drive comparable store sales growth last month
Improved weather coupled with a slew of promotions helped to drive traffic and sales gains for US apparel retailers in May - with analysts expecting the upward trend to continue into June.
Comparable store sales for the retail sector as a whole increased 4.5% in May, according to first figures from Retail Metrics. This was up on the research company's consensus of 3.4% growth. The International Council of Shopping Centers (ICSC), meanwhile, was more upbeat with its preliminary gain of 4.8%.
Including Gap's 1% rise, which came in after the market closed yesterday (5 June), Retail Metrics said May comparable store sales rose a better-than-expected 4.6%.
"Robust Mother's Day and Memorial Day weekend business aided by a heavy dose of promotional activity on the part of most retailers provided shoppers with enticing deals," said Retail Metrics president Ken Perkins.
"The macro backdrop underpinning consumer spending remains tenuous, however, as the employment picture is improving but wage gains for the vast majority of consumers have been modest at best."
ICSC chief economist and vice president and director of research, Michael Niemira, added: "The beat went on as consumer spending continued to remain quite healthy this past month with pent-up demand lifting sales after tough weather conditions constrained sales in the first few months of the year.
"We expect the June pace to remain strong, but moderate slightly as a ‘tough' comparison with June 2013 exists."
Winners and losers
All but one retailer booked comparable store sales gains in May, with the biggest coming from Zumiez. The teen apparel chain booked a healthy 3.6% increase during the month, exceeding lowered expectations.
L Brands, formerly known as Limited Brands, has exceeded expectations every month this year, racking up a 3% comparable store sales rise in May, at the top end of its 1-3% guidance.
It has reported just two negative comparable store sales results in the last 57 months. Although inventories were up 2% last month, L Brands expects them to be flat at the end of the quarter.
Specialty apparel chain the Cato Corporation also booked a 3% comparable store sales rise, which was in line with expectations.
"May sales continued our recent trend," said chairman, president and CEO John Cato. "However, we continue to expect the remainder of the year will be in line with our original guidance."
Although Gap Inc recorded a slight increase in May comparable store sales, not all of its brands posted gains. While Banana Republic and Old Navy booked respective comparable store sales growth of 3% and 2%, Gap Global reported a 3% drop.
Nonetheless chairman and CEO Glenn Murphy said: "We delivered a positive comp to start the second quarter, building on last May's strong performance."
However The Buckle, which saw comparable store sales fall 3.1% in May, has reported negative figures for three of the first five months of the year.
"The teen space has been the weakest performing retail segment both in terms of same store sales and earnings growth over the past few quarters," Perkins noted.
May sales overview
Action sportswear and footwear retailer Zumiez booked a 3.6% increase in comparable store sales for the four weeks to 31 May. The company, which operates 564 stores, said net sales grew 13.3% to $49.5m from $43.6m in the same period last year.
Denim specialist The Buckle saw May comparable store sales, for stores open at least one year, fall 3.1%. But net sales edged down 1.2% to $72m from $72.8m a year ago for the company, which operates 453 stores.
Value-priced fashion retailer The Cato Corp saw net sales increase 6% to $86.4m during the four-week period from $81.7m last year. The company, whose brands include Cato, Versona and It's Fashion, said May comparable store sales rose 3%.
L Brands, owner of the Victoria's Secret, Pink and La Senza brands, posted a 3% rise in comparable store sales. Net sales grew 4% to $763.6m from $737m for the company, which operates 2,928 stores.
For Stein Mart, comparable store sales climbed 0.4% during the four weeks to 31 May. Net sales reached $109.6m, up 2.2% from $107.3m a year ago. The company ended the month with 265 stores.
And over at clothing giant Gap Inc saw May comparable store sales edge up 1%. Net sales increased 4% to $1.27bn from $1.22bn last year for the San Francisco-based retailer, which operates around 3,100 stores.
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