June Sales Weak, As Some Expected
June retail sales were soft. The International Council of Shopping Centers trade group reported that U.S. retail increased by a wan 0.2 percent.
ICSC Chief Economist Michael Niemira insisted there was more than one culprit for the tepid showing.
“Volatility is the word that best describes the June performance,” Niemira said. “Weather was one factor that was cited as a drag on the overall performance, but some retailers pointed to broader economic uncertainty as well.”
Some retail segments did well, Niemira noted. Luxury stores continued their winning streak. Seattle-based Nordstrom Inc. reported a same-store-sales increase of 8.1 percent for June. Off-pricers also reported successful June business. Carol Meyrowitz, chief executive of the Framingham, Mass.–based TJX Companies Inc., said her company’s June same-store-sales increase of 7 percent “significantly exceeded our expectations.”
For Adrienne Tennant of the Philadelphia-based Janney Capital Management financial-services firm, June sales represented the culmination of lowered expectations. Without a major sales catalyst such as the upcoming Back-to-School season, masses of consumers had no pressing need to shop, she wrote in a July 5 research note. But soft sales were in line with Wall Street’s expectations, and most businesses had planned for soft business for the month.
June sales presented a surprise for Macy’s Inc. The department-store giant said its same-store-sales increase of 1.2 percent was below expectations. A company statement blamed a stagnant macroeconomic environment and lower-than-forecasted spending by tourists in New York, as well as renovation at one of its biggest locations, the Macy’s in New York’s Herald Square, which created a disruption of business for the company.
While business for off-pricers seemed great and sales for department stores seemed solid, despite falling below expectations, June business for specialty retailers was a mixed bag. The Buckle Inc., based in Kearney, Neb., posted a decline of 2.5 percent in June. The denim-focused store’s same-store sales had been growing weaker since April, when it reported a same-store-sales increase of 1 percent.
Zumiez Inc., based in Everett, Wash., reported a robust same-store-sales increase of 8.2 percent. The Wet Seal Inc., based in Foothill Ranch, Calif., reported a decline of 9 percent in same-store sales. Wet Seal Chief Executive Susan McGalla said that the June performance was in line with the company’s expectations.
Wall Street analyst Liz Pierce of Roth Capital Markets, headquartered in Newport Beach, Calif., wrote that Wet Seal demonstrated good performances in some categories, such as dresses and shorts, but categories such as knit tops continue to present a challenge for Wet Seal.—Andrew Asch
