Apparel was one of the strongest performing retail categories in September

Apparel was one of the strongest performing retail categories in September

Upside surprises were provided in September by two of the US apparel retailers who still report their monthly sales thanks to an uptick in consumer confidence and improving unemployment rates. The remaining three failed to capitalise, however, with The Buckle faring the worst. 

According to first figures from research firm Retail Metrics, comparable store sales for the US retail sector as a whole increased 0.5% year-on-year in September. This was against an expected decline of 0.5% but compared to a slightly higher 0.8% increase in August.

Ken Perkins, president at the research firm Retail Metrics, says macroeconomic data was mixed for September but two key drivers, a solid job market and improving wage gains, along with low gas prices, were favourable. 

Winners and losers

Despite this, all but two of the apparel retailers still reporting monthly comparable store sales posted declines in September, with one company reporting a double-digit fall.

Denim specialist The Buckle fared the worst with a comparable store sales decline of 15.5%, marking its seventh straight double-digit decline and its 15th consecutive monthly same-store sales drop. The figure was well short of Retail Metrics' consensus estimate of a 10.4% decline. The retailer, which operates 465 retail stores, saw net sales decline 14.8% to US$82.9m for the four weeks ended 3 October, from $97.4m in the year-ago period.

San Francisco-based Gap Inc, which operates around 3,300 company-operated stores and 450 franchise stores, turned in its 17th negative monthly comparable sales result and a fall in net revenues for September, but beat analyst expectations. Comparable sales slid 3% versus a 1% decrease last year – beating analyst predictions of a 3.6% decline. 

Same-store declines for September were recorded at its Banana Republic and namesake brands, of 9% and 10%, respectively. Old Navy was the best-performing division and managed to generate a positive 4% comp gain. Gap said all divisions were negatively impacted by the fire last month at its Fishkill distribution centre. 

"While we remain focused on performance across the portfolio, we are pleased to see a strong customer response to Old Navy's product assortment, which continues to drive positive momentum at our largest brand," said Sabrina Simmons, chief financial officer, Gap Inc.

Meanwhile, comparable store sales for value-priced fashion and accessories retailer Cato Corporation continued on their negative trend in September and remained well below company expectations, falling 9%. Net sales for the month dropped 8% to $76.2m. The retailer operates 1,367 stores under the Cato, Versona and It's Fashion formats.

CEO John Cato, said: "September same-store sales were well below our expectations. We now expect third quarter earnings per diluted share will be in the range of $0.07 to $0.11 versus $0.30 last year and down from our previous guidance of $0.13 to $0.18. The decrease in earnings due to lower sales is offset by favourable adjustments to the effective tax rate as a result of continuing tax initiatives."

L Brands, owner of the Victoria's Secret, Pink and La Senza brands, saw the month's second strongest performance, turning in a 3% comparable store sales rise for September. Net sales increased 6% to $971.4m for the four weeks ended 1 October. The company operates 3,053 company-owned speciality stores in the US, Canada, the UK and Greater China.

While, speciality apparel and footwear retailer Zumiez put in the strongest performance, with a 6.3% increase in comparable store sales. Total sales were up 11.5% to 11.5% to $75m. The company operates 682 stores across the US, Canada, Europe and Australia.