Comparable store sales were subdued for US apparel retailers in January

Comparable store sales were subdued for US apparel retailers in January

Hurt by adverse weather conditions, a continued shift by consumers to invest in high-value items such as cars, and a general slump after the holiday period, it's no surprise US apparel retailers suffered in January, with many reporting comparable store sales declines.

First figures from research firm Retail Metrics show comparable store sales for the US retail sector disappointed, falling 0.9% – below expectations for a 0.4% rise and below December's 0.9% increase.

But including Gap Inc's 8% drop, which missed estimates for a 3.9% fall, the research firm said the decline steepened to 1.3% 

With January being a transitional and clearance month, Retail Metrics president Ken Perkins said traffic and conversion looked "uninspiring" across the mall as consumers took a breather from holiday spending. 

While auto sales continued at a robust pace – and possibly crowded out mall purchases, storm Jonas took a bite out of sales later in the month, forcing multiple store closures on the east coast. 

Despite the somewhat challenging month, Perkins said: "Job data remains solid and gas prices continue to fall which should bolster consumer spending."

Winners and losers

All of the apparel retailers still reporting monthly comparable store sales reported declines during the month, with The Buckle and Cato Corp faring the worst.

While The Buckle posted the highest decline at 11.3% – far worse than Retail Metrics expectations for a 4.3% drop – Cato Corp lowered both its fourth-quarter and full-year guidance after a 7% year-on-year drop, blaming adverse weather and increased costs. 

Cato now expects fourth-quarter earnings per share to range from $0.32-$0.36, compared to its earlier guidance of $0.39-$0.43. Full-year earnings per share are forecast to be between $2.28 and $2.32, down from its previous guidance of $2.35-$2.39. 

Stein Mart also blamed adverse weather on its comparable store sales decline. "January comparable store sales were flat through the middle of the third week of the month, but then dropped for several days due to a winter storm that impacted the East and Mid-Atlantic areas," said CEO Jay Stein. 

Gap, meanwhile, entered January with excess inventory after what proved to be a very difficult holiday selling season. Intense competition and warm weather throughout November and most of December exacerbated sluggish sales as it worked to dampen winter apparel sales, Perkins explained. As a result, Gap was on sale at 40% continuously throughout the holiday season that stretched into January as well.

Banana Republic saw comparable store sales decline 17%, while both Old Navy and Gap's namesake brand were down 6%.

For Zumiez, January marked its tenth consecutive month of comparable store sales declines, but beat Retail Metrics' expectations for an 11.3% drop. 

And although L Brands posted a drop in comparable store sales, weighed down by a timing shift in the Victoria's Secret semi-annual sale into December, the company lifted its fourth-quarter earnings outlook. 

The company now expects earnings per share to reach $2.05, up from its earlier forecast of $1.85-$1.95. Excluding the impact of the timing shift, comparable store sales would have climbed 1%. 

January sales overview

For action sportswear and footwear retailer Zumiez, comparable store sales fell 4.6% during the four weeks to 30 January. The company, which operates 658 stores, said net sales were down 2.3% to $43.2m from $44.1m last year. 

Denim specialist The Buckle saw comparable store sales, for stores open at least one year, decline 11.3%. The company, which operates 468 stores, said net sales fell 10.1% to $53m from $58.9m a year ago. 

At value-priced fashion retailer Cato, January comparable store sales dropped 7%. The owner of the Cato, Versona and It's Fashion brands posted net sales of $52.9m, down 4% from $54.9m in the prior year period. 

L Brands, owner of the Victoria's Secret, Pink and La Senza brands, booked net sales of $811.3m, up 4% from $783.1m last year. Comparable store sales, however, slipped 2% year-on-year. 

Off-price fashion retailer Stein Mart saw comparable store sales fall 2.2%. Net sales edged down 0.1% to $69.5m from $69.6m a year ago for the company which operates 278 stores. 

And Gap reported an 8% decline in comparable store sales, weighed down by its Banana Republic brand. The company, which operates 3,300 stores, said amounted to $813m, down 8.4% from $888m last year.