September Retail Sales Flummoxed by Calendar Shift
September sales were soft for many apparel retailers.
Retailers and Wall Street analysts placed much of the blame for the sales declines on a shift in fiscal calendars, which are used for accounting purposes and sometimes differ from calendar years.
Mall-based action-sports chain Zumiez Inc. noted that the fiscal-calendar shift was the driver of its 8 percent decline in net sales over September.
One crucial fiscal-year week of back-to-school business was shifted to August, said Darin White, Zumiez’s director of finance and investor relations. However, the fiscal shift did not affect the retailer’s same-store sales. Zumiez posted a 1.2 percent bump in its September same-store sales.
Warmer weather across the United States also put a damper on apparel sales, said Jeff Van Sinderen of B. Riley FBR. Fall clothes and cold-weather apparel are not appealing when the sun is shining, he said.
Extreme weather hurt sales for Cato Corp., headquartered in Charlotte, N.C. It has stores located in North Carolina and South Carolina, areas lashed by Hurricane Florence in September, which resulted in billions of dollars in damages, said John Cato, the retailer’s chairman, president and chief executive officer.
“September same-store sales were below our expectations,” Cato said. “However, same-store sales in September had a slight negative impact from the net result of Hurricane Florence this year offset by Hurricane Irma last year, both causing business disruption and closed stores.”
The Buckle Inc. also posted soft sales. The denim-focused mall retailer reported a 2.4 percent decline in same-store sales. L Brands, Inc. reported strong same-store sales in September. It saw a 5 percent jump in business.
L Brands also made news by announcing it is exploring sales for its La Senza division, a retailer that launched in Canada and was acquired by L Brands in 2006. La Senza’s 2018 operating loss will be $40 million, according to an L Brands estimate.
Other recent retail news included an imminent bankruptcy filing by Sears Holdings. Once a leading U.S. department store, Sears Holdings has been talking with banks about securing financing to operate during an expected filing, according to news reports.
Despite some tough headlines, Wall Street analysts are forecasting that the holiday 2018 season will be strong.
“[September] won’t tell you how the holiday will be,” Van Sinderen said. “We’ll get a sense of how the holiday will be in November. All of the tea leaves point to it being a solid holiday season.”
The National Retail Federation forecasted a robust holiday season, with sales rising between 4.3 percent and 4.8 percent over last year.