June Sales Drop 5.1 Percent
American retail sales in June dropped 5.1 percent, according to the International Council of Shopping Centers. However, some economists were optimistic despite the decline.
One Wall Street analyst, Todd Slater, with Lazard Capital Markets, said there were hopeful signs in the economic picture. “It is not as bad as it seems,” Slater said in a research note dated July 9. “Inventories are low, sales trends are becoming more predictable and many retailers raised their guidance.”Among the retailers raising their earnings guidance were off-price retailers such as Pleasanton, Calif.–based Ross Stores Inc. and Framingham, Mass.–based The TJX Companies Inc.
ICSC’s chief economist, Michael Niemira, said the retail market had generally suffered poor sales since December, but the good June performances of a handful of retailers made him optimistic. “These nascent signs of improvement are important since history suggests that consumer spending typically starts off sluggish prior to significant improvement.”
Some retailers with a young adult and teen audience reported good June sales performances. Kearney, Neb.–based The Buckle reported an increase in its June same-store sales of 9.6 percent compared with the same time in the previous year. Aeropostale had a June same-store sales increase of 12 percent compared with the same time in the previous year.
Still, June was tough for many department stores. Dillard’s reported a decline of 14 percent. Luxury store Neiman Marcus reported a decline of 20.8 percent.
Many specialty chains did not fare much better. San Francisco–based Gap reported a same-store sales decline of 10 percent in June. Wet Seal, based in Foothill Ranch, Calif., reported a 11.1 percent decline.
Slater, the Lazard analyst, forecast retail sales performances will remain weak until deep into the fourth quarter. The ICSC’s Niemira also wrote that the short-term picture for retailers would be tough. He forecast retail sales to decline 5 percent in July. —Andrew Asch
