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August Business Mixed
The U.S. economy was good in August, but retail sales ranged from solid to soft.
The Bureau of Labor Statistics announced that 156,000 jobs were added during the month. The jobs report was lower than forecast, according to some analysts. But the miss didn’t put a damper on consumer confidence. Lynne Franco, director of economic indicators of The Conference Board, which measures consumer confidence, said that good feelings about the economy increased in August, according to the index kept by the New York–headquartered Conference Board.
Zumiez Inc. runs a fleet of 606 mall-based Zumiez action-sports shops across America. In August, its same-store sales increased 7.4 percent while its net sales increased 10.1 percent to $98.6 million. Zumiez also announced on Sept. 7 that it would open nine stores in America during the remainder of fiscal 2017.
Business was solid for L Brands—the parent company for Victoria’s Secret, Bath & Body Works and Henri Bendel—which posted sales that hit the mid-point of its guidance for August business, said Ken Perkins, the president of market-research company Retail Metrics.
L Brands posted a same-store-sales decline of 4 percent in a year-over-year comparison. The performance was slightly better than Wall Street forecasts that L Brands would post a 4.2 decline during August. The company said that its Victoria’s Secret brand’s exit from the swim and apparel categories earlier this year continues to place a drag on its performance. A company statement noted that the exit from swim had a negative impact of about 2 percentage points for the total company.
In August, denim-focused mall retailer The Buckle posted a same-store-sales decline of 7.9 percent. Value retailer Cato Corp. reported a year-over-year comp-store decline of 10 percent in August.
Before August sales were released, retail trade group National Retail Federation revised its business forecast for 2017.
In February, NRF announced that retail sales—excluding auto sales, restaurants and gas stations—would increase 3 percent to 4.2 percent.
On Sept. 6, it revised its 2017 sales projection. The year’s sales are forecast to grow 3.2 percent to 3.8 percent. The US Bureau of Economic Analysis announced Aug. 31 that it made slight changes to forecasts on American consumers’ personal income and consumption, said Jack Kleinhenz, NRF’s chief economist. But the U.S. economy should keep chugging along. “While weaker-than-expected spending in the first quarter along with decelerating inflation has also contributed to the revision, NRF anticipates stronger sales heading into the fall and holiday seasons,” he said.
