July Sales Range From Soft to Solid
July retail sales missed estimates forecast by the International Council of Shopping Centers, a leading trade group for the shopping-center business.
ICSC’s tally of retailers’ comparable store sales showed an increase of 4.4 percent over the previous year. However, the trade group estimated that July retail sales would climb 5 percent to 6 percent.
Michael Niemira, ICSC’s vice president of research and chief economist, called July’s sales performance solid. He blamed the missed forecast on a slow start to the Back-to-School season. An ICSC-Goldman Sachs survey released in July noted that this year’s Back-to-School would have a slow start.
July’s slower sales were caused by higher gas prices, the payroll-tax increase and a lack of wage gains, according to an Aug. 8 research note from Ken Perkins, president of Boston-area market-research firm Retail Metrics. Perkins wondered if the slowdown bode well for the Back-to-School season.
“The question arises—are we in the midst of a spending slowdown or are consumers holding off and shopping closer to need? Or both?” he wrote.
Adrienne Tennant, a Wall Street analyst who works for Janney Capital Markets, also wrote that a soft July might forecast the pace of the market. “We believe choppy traffic trends during the month of July are indicative of a soft consumer environment for the back half of the year,” she wrote in an Aug. 8 retail note.
While most of the month was defined by slow mall traffic, it surged at the end of July because of a tax holiday in 18 states, mostly in the South, Tennant said.
Same-store sales for July included a 0.8 percent increase foran action-sports retailer Zumiez Inc.;a3.7 percent increase by off-pricer Stein Mart;anda 3 percent increase by L Brands Inc., the parent company of Victoria’s Secret. On Aug. 8, L Brands increased its forecast for second-quarter earnings per share to 60 cents, compared with its previous guidance of 50 to 55 cents.
Foothill Ranch, Calif.–based Wet Seal Inc. reported results on Aug. 8 for its second quarter for its 2013 fiscal year. Same-store sales showed an increase of 3.7 percent, compared with a decline of 11.1 percent in the same quarter of the previous year. The company made $137.2 in net sales in its second quarter, which was a 1.5 percent increase compared with the same quarter in the previous year.