July '02 Sales Hit the Skids
Citing a tough comparison period and lean inventories, many retailers reported worse-than-expected results for the month of July, portending a lackluster Back-to- School season.
Both discounters and department stores were going up against the year-ago period of federal tax rebates, which spurred spending on big-ticket items. Depleted inventories also presented missed opportunities for retailers, especially discounters.
Wal-Mart Stores Inc. reported a 4.5 percent increase in same-store sales, below Wall Street’s estimate of 5.2 percent. Target Corp., which spooked the retail industry with sales falling below plan during the second week of July, said that same-store sales were up 1.0 percent, short of the company’s forecast.
While most department stores reported negative results, Kohl’s Corp. was the silver lining with a 7.5 percent gain in same-store sales. May Department Stores Inc. announced that same-store sales were down 6.2 percent, worse than the 3.8 percent decline that Wall Street analysts expected.
Specialty retailers also couldn’t shake off the economic malaise. Gap Inc. announced that same-store sales declined 8.0 percent, worse than the 6.3 percent decrease that analysts had expected. Bebe’s same-store sales plunged 9.1 percent. Even teen retailers felt the sales blues. Hot Topic, once a Wall Street darling, reported a 2.2 percent decline in same-store sales due to weakness in men’s apparel. And Wet Seal reported an 8.3 percent decrease in samestore sales, citing sluggishness in Florida and Texas. —Nola Sarkisian-Miller
