Oct 8, 2009
Same-store sales show some growth
Oct 8, 2009
By Jessica Wohl
CHICAGO (Reuters) - U.S. retailers, including Limited Brands Inc and Children's Place, surprised Wall Street with small increases in September sales, suggesting that shoppers could be heading back for the crucial holiday season.
This year's later Labor Day holiday was expected to push a good chunk of sales from August into September. But consumers' concerns about the economy, especially unemployment hovering close to 10 percent, weighed on spending.
Early results show that some retailers bucked the recent trend of consumers cutting back sharply on discretionary purchases. But close to 20 chains, including department stores, had not yet issued their results early on Thursday (8 October) morning.
Limited, whose chains include Victoria's Secret, posted a 1 percent increase in sales at stores open at least a year. Analysts expected a 2.4 percent decline.
Children's Place Retail Stores Inc also reported an unexpected 4 percent rise in comparable sales. The results were aided by strong growth online, which the company includes in that figure.
"To see a retailer be very weak this September means that there probably has been a fundamental shift in consumption of their product," said Doug Conn, managing director and retail credit specialist at Hexagon Securities.
Analysts had forecast an average decline of 1.1 percent in September sales at stores open at least a year, according to Thomson Reuters data. That would be the smallest monthly drop since September 2008, when same-store sales fell 0.9 percent.
Retailers have posted consecutive declines in monthly same-store sales since September 2008, when Lehman Brothers' bankruptcy triggered a global financial crisis. In the previous month, retailers had notched a 0.2 percent gain.
Hot Topic Inc, which caters to tweens and teens with trendy items like "Twilight" T-shirts, topped expectations with a 4 percent decline in same-store sales. The smaller-than-expected decline came from growth at its Torrid chain, which sells clothing for larger women. Sales at the main Hot Topic chain declined.
Fellow teen apparel retailer Buckle Inc saw sales rise, but not as much as expected.
Value-oriented chains continued to reap benefits during the downturn, as Family Dollar Stores Inc and Costco Wholesale Corp showed on Wednesday 7 October. Each posted better-than-expected profits and said sales had improved in September from preceding months.
Analysts expect Kohl's Corp to post a 0.1 percent increase in September same-store sales, the only positive figure they anticipate from any of the department stores.
(Reporting by Jessica Wohl, additional reporting by Abhishek Takle in Banagalore; Editing by Lisa Von Ahn)
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