Half of the apparel retailers still reporting monthly comparable store sales booked increases in September

Half of the apparel retailers still reporting monthly comparable store sales booked increases in September

September proved a mixed month for the handful of US apparel retailers still reporting their monthly comparable sales, as growth remained up on last year and the prior month but two firms returned to their negative trajectory.

According to research firm Retail Metrics, total September same-store sales for retailers came in at 7.9%, easily beating the company's 4.7% consensus. This was up from 7.8% a year ago and compares to a 6.2% increase in August and an 7.5% gain in July.

September is typically characterised by late back-to-school selling early in the month with a transition to colder fall apparel and seasonal assortments.

Retail Metrics president Ken Perkins said US economic performance this year has provided a strong tailwind for the retail industry, with wages ticking up and business and consumer confidence are both elevated.

"On numerous occasions we have raised concerns about a hollowed out American middle class that has occurred over the past several decades. This has capped the retail industry's upside as fewer consumers have the means to spend at middle class levels," he added. "Nonetheless, consumer spending conditions are the best they have been in over a decade. Friday's unemployment report came in at just 3.7% - its lowest level since December 1969."

Winners and losers

Half of the apparel retailers still reporting monthly comparable store sales booked increases in September but one returned to its negative trajectory and the other continued its downward trend.

This was Nebraska-based denim specialist The Buckle, which reported a weaker than expected 2.4% same store sales decrease that fell short of Retail Metrics' -1.2% consensus estimate. Buckle has missed monthly comp forecasts in three of the last four months while posting negative same store sales results in six of the first nine months of 2018. Net sales also declined, slipping 3.2% to US$75.4m from $77.9m last year.

Meanwhile, value-priced fashion and accessories retailer Cato Corporation reported its first negative monthly comp since April with September comps falling 1%. Total company September sales were also down by 1% at $69.4m from $69.8m last year.

CEO John Cato said: "September same-store sales were below our expectations. However, same-store sales in September had a slight negative impact from the net result of Hurricane Florence this year offset by Hurricane Irma last year both causing business disruption and closed stores."

L Brands, owner of the Victoria's Secret, Pink and La Senza brands, turned in a 5% September comp that easily exceeded Retail Metrics' 0.9% consensus estimate. This was the Columbus-based chain's largest monthly same store sales gain since May and eighth positive comp in the last ten months. Net sales totalled $1.1bn for the five weeks ended 6 October 2018, an 8% increase on net sales of $981.6m for the five weeks ended 30 September 2017. 

Speciality apparel and footwear retailer Zumiez, meanwhile, booked a 1.2% comp sales rise. The Seattle-based chain was up against a steep 9.3% year ago comparison and narrowly missed Retail Metrics' 2% consensus estimate. September marked Zumiez's 19th consecutive positive monthly comp. Total revenues for the month, however, fell 8% year-on-year to $77.7m, impacted by a shift in the retail calendar.