Warmer than average temperatures and worries over a government shutdown impacted retail sales last month

Warmer than average temperatures and worries over a government shutdown impacted retail sales last month

Lacklustre back-to-school sales, warmer than average temperatures, waning consumer confidence, worries over a government shutdown, and stagnant wage growth all combined to give another mixed sales bag for US apparel retailers in September.

According to Retail Metrics and the International Council of Shopping Centers (ICSC), same-store sales at US retailers grew 4% in September, compared with a 3.8-3.9% rise in August and a 4.4% increase in July.

Excluding gasoline sales and results from retailer Gap Inc (which reports after the markets close), same-store sales increased 5.1%, a tally complied by the ICSC found. But apparel was the weakest performing segment, posting a gain of just 0.1%.

Ken Perkins, president of research firm Retail Metrics, added that "the lack of any newness or buzz to the fall fashion cycle" contributed to apparel retailers' woes.
And excluding strong results from the Rite Aid and Walgreen's drug store chains, he said retailers posted a more modest 2.8% gain during the month.

The results and their backdrop point to weaker forecasts in the run-up to the holiday season. For October, ICSC research anticipates that comparable-store sales will increase between 3% and 4.0%.

However, the backdrop of the federal government shutdown does have the potential to curb spending during the month, it says. 

Looking further ahead, Perkins noted: "Given the recent softness in department store and specialty apparel retail spaces resulting in a sluggish back-to-school selling season, we are increasingly concerned about the prospects for the upcoming holiday shopping season.

This is particularly apparent "given the relative strength in spending we have seen on autos, home furnishings, appliances, and on homes, which really look to be crowding out spending and leading to broader promotions across the mall," he added.

Winners and losers
Value fashion retailer Stein Mart was by far the winner on the apparel front, with a 5% same-store sales increase in September.

Linens, women's boutique, gifts, women's career sportswear and women's recorded the strongest sales for the month, while women's accessories, men's furnishings, women's casual sportswear and petites were more challenged, the company noted.

Geographically, sales were strongest in Florida, the Southeast and California, while the Midwest and Northeast performed lower than the chain.

In contrast, teen apparel chain The Buckle posted a 4.5% in same-store sales last month, as well as flat net sales of $99.1m.

Cato Corporation, meanwhile, said it expects third-quarter earnings per diluted share to be at the higher end of its $0.02-0.09 guidance, but down on last year's $0.16.
"September same-store sales were within our guidance and consistent with our current trend," stated Cato Corp chairman, president and CEO John Cato.

Like many other retailers, Perkins explained, Limited Brands (now known as L Brands) was forced to be more promotional due to sluggish traffic levels and soft economic growth.

But speciality clothing retailer Gap Inc continues to be confident in its outlook. "While September proved to be somewhat challenging, we remain steadfast in our commitment to deliver on our full-year goals," said chairman and CEO Glenn Murphy.

US retailers' September 2013 sales roundup
Action sportswear and footwear retailer Zumiez saw sales reach US$58.9m during the five weeks to 5 October, down 6% from $62.7m in the same period of last year. Same-store sales slipped 0.6% for the company, which operates 542 stores across the US, Canada and Europe.

At value-priced fashion apparel retailer The Cato Corporation, sales rose 3% to $72.9m from $71.1m in the prior year. Same-store sales, however, fell 3% year-on-year. The company, whose brands include Cato, Versona and It's Fashion, opened three new stores in September, taking its total number of stores to 1,312.

For Limited Brands, same-store sales edged up 1% during the month. Net sales reached $786m, up 1.6% from $773.6m in the same period last year for the company, which owns the Victoria's Secret and La Senza lingerie brands.

Denim specialist The Buckle said same-store sales declined 4.5% during the five-week period. The company, which operates 451 retail stores across 43 states, said net sales were flat at $99.1m.

Off-price fashion retailer Stein Mart, meanwhile, recorded a 7.3% increase in September net sales to $112.2m from $104.6m in the same month last year. Same-store sales were up 5% at the company which opened three stores during the month, taking its total number of stores to 263.

And speciality clothing retailer Gap Inc saw September same-store sales slipp 3%, due to declines at all of its brands, which include Banana Republic and Old Navy. The San Francisco-based retailer, which operates around 3,100 stores, said total sales were flat against last year at US$1.46bn.