July Same-Store Sales Come in Above Forecast

Aggressive promotions by apparel retailers in July provided consumers with incentives to shop, leading to better-than-expected comparable store sales growth for the month. The focus is now turning to the upcoming back-to-school shopping season.

First figures from Retail Metrics showed comparable store sales for the U.S. retail sector as a whole grew 4.7% — above the 4.5% forecast. Including Gap’s 2% comparable store sales rise, which came in after the market closed yesterday, Retail Metrics said July growth was even higher, at 4.8%.

“The apparel segment has been under pressure for some time suffering from a lack of fashion buzz, intense price competition from fast fashion/discount chains, and consumers spending money in other areas,” said Retail Metrics president Ken Perkins.

The International Council of Shopping Centers (ICSC) was even more optimistic with its 5.4% preliminary gain, on top of a 4.2% increase in July.

Jesse Tron, a spokesman for ICSC, added: “Sales posted an even stronger than expected pace; a very positive sign for retailers as we begin the back-to-school shopping season.”

With the majority of consumers planning to make their back-to-school purchases this month, Tron expects the strong sales trend to continue next month.

Winners and losers
All of the apparel retailers which now report monthly sales posted gains in July, with the majority coming in better-than-expected. Teen apparel chain Zumiez’s 3.5% comparable store sales increase beat Retail Metrics consensus by 80 basis points.

The Buckle turned in a 0.5% July comparable increase, which exceeded consensus expectations for a 70 basis point decline. This was the first time the company has posted back-to-back monthly comparable store sale gains since July-August last year.

Off-price fashion retailer Stein Mart turned in its ninth consecutive quarter of positive sales. “July sales trended higher in the second half of the month driven by early fall receipts,” CEO Jay Stein noted.

“We continue to have a positive outlook for 2014 as the underlying fundamentals of our business and growth strategies remain in place.”

Gap chairman and CEO Glenn Murphy said he was “pleased” with the retailer’s positive comparable performance. Although results were weighed down by on-going struggles at its namesake Gap division, the company beat modest expectations for a 0.6% gain. 

July sales overview
Action sportswear and footwear retailer Zumiez saw comparable store sales increase 3.5% for the four weeks to August 2. The company, which operates 582 stores, said net sales grew 11.9% to $62.8 million from $56.1 million in the same period a year ago.

Mall-based retail The Buckle posted a 0.5% rise in July comparable store sales. Net sales were up 2.3% to $79 million from $77.2 million last year for the company, which operates 456 stores across the U.S.

Off-price retailer Stein Mart recorded a 0.8% increase in July comparable store sales. The company, which operates more than 260 stores, saw net sales climb 0.9% to $75.3 million from $74.6 million in the prior year.

And Gap Inc. saw comparable store sales rise 2%, driven by gains at Banana Republic and Old Navy. The San Francisco-based retailer, which operates more than 3,100 stores, said net sales grew 5% to $1.17 billion from $1.12 billion the prior year.

For more fashion and apparel industry news, go to just-style.com

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