Few High Points Among June's Tepid Retail Results
June retail sales were marked by tepid growth during a period when cash registers should have been ringing in strong sales, according to many Wall Street analysts.
American chain stores reported an increase of 3 percent in June compared with the same time in the previous year, according to a compilation of 31 chain-store sales reports tracked by the International Council of Shopping Centers, a New York–based trade group.
ICSC chief economist Michael P. Niemira called the month’s sales uneven. “The June performance was relatively uneven as lower prices and discounting held back the reported pace of spending,” he said in a prepared statement.
Typical sales catalysts include weather changes and holiday weekends. The Memorial Day and Fourth of July weekends, which bookended the month of June, had many Wall Street analysts hoping for much better sales, said Liz Pierce, an analyst with Newport Beach, Calif.–based Roth Capital Partners. “It was not a blowout month, even with calendar shifts and hot weather,” she said. “It leads to increased uncertainty.”
Retailers might be hoping to surf a big wave of more-robust retail sales during the upcoming Back-to-School season, Pierce said.
Jeff Van Sinderen of Los Angeles–based B.Riley & Co. cautioned against getting too upset over June sales. “June is a promotional month. But it also is a clearance month,” he said regarding June’s traditional place on the retail calendar. It is the month when retailers typically clear merchandise out for the Back-to-School season.
June marked the continuation of a long streak of good business for Ross Stores Inc., the off-price retailer based in Pleasanton, Calif. It forecast a same-store-sales increase of 3 percent to 4 percent in June but ended up reporting a 5 percent increase for the month.
The long-suffering Hot Topic Inc. also beat estimates in June. A consensus of analysts forecast that Hot Topic would report a decline of 5 percent for its June business; instead, the company reported a decline of 2.1 percent for June.
The Buckle Inc. disappointed when it reported a 7.3 decline in its same-store sales. The consensus estimate was decline of 0.2 percent. According to Roth’s Pierce, the Kearney, Neb.–based chain stumbled because of erratic retail traffic, a lack of newness in women’s denim and difficult comparisons to its stellar same-store sales for June 2009, when it reported an increase of 9.6 percent.
For July, the ICSC forecast a sales increase of 3 percent to 4 percent compared with the same time in the previous year.—Andrew Asch
