Retail Sales Better Than Forecast in June
The summer season got off to a galloping start as chain retailers across the board reported better-than-expected sales.
U.S. chain-store sales rose by 6.9 percent on a year-over-year basis, according to the International Council of Shopping Centers. “Helping to drive sales were stronger employment growth, better weather and summer clearance,” said Michael P. Niemira, chief economist of the ICSC.
Chief executives from off-pricers Ross Stores Inc. and The TJX Companies Inc., as well as department store Macy’s Inc., reported that their sales exceeded expectations. Mass retailer Target Corp.’s June same-store-sales increase, 4.5 percent, hit the high end of the company’s guidance, said Gregg Steinhafel, Target’s chairman, president and chief executive officer.
June business was driven by Father’s Day and Fourth of July sales. The month also is traditionally a strong time for the luxury business because graduations and weddings are often planned for June.
Discretionary spending was up during the month because the summer vacation season begins in June, said Michael McNamara, vice president or research and analysis for MasterCard Advisors SpendingPulse.
SpendingPulse research also noted that specialty apparel did well in June, but the segment’s sales statistics were helped by easy year-over-year comparisons with last year’s soft business. But high unemployment and gas prices continue to hamper broader growth, McNamara said.
Teen retailers had a lot to cheer about in June. Same-store sales for Zumiez Inc. increased 9.8 percent, and same-store sales for Hot Topic Inc. for the month increased 0.4 percent. Analysts surveyed by Thomson Reuters had forecasted Hot Topic’s same-store sales would decline 2.4 percent and that Zumiez’s would only increase by 5.6 percent. Wet Seal Inc. reported a same-store-sales increase of 7.3 percent, compared with a decline of 3.6 percent in June of 2010.
Specialty retailer Gap Inc. had good news to report across all of its divisions, the first time it could report such news since January. Same-store sales for its Banana Republic North America, Old Navy North America and international divisions comped 3 percent, 2 percent and 3 percent, respectively, compared with the same time in the previous year.
Gap North America division’s same-store sales declined 1 percent compared with a 2 percent decline in the previous year. Glenn Murphy, Gap Inc.’s chairman, said, “Our multiple growth initiatives are on track, and we’re taking the necessary steps in North America to grow top-line sales in the back half of the year.”
June’s strong sales are forecast to continue in July, according to the ICSC, which predicts chain-store sales will grow 4.5 percent to 5 percent in July.—Andrew Asch
