July Sales Tough

Retail sales generally disappointed in July, at the beginning of the important Back-to-School season, said Ken Perkins of market-research group Retail Metrics.

“Retailers are not heading into the key Back-to-School selling season with much momentum, and we expect [Back-to-School] 2015 to be highly competitive with sales gains difficult to come by,” he wrote in an Aug. 6 research note.

Zumiez Inc., a favorite with school-age youth, posted a same-store-sales decline of 7.6 percent for its July sales. Perkins said it was Zumiez’s biggest drop since January 2014. Rick Brooks, chief executive officer of the Lynnwood, Wash.–based company, blamed the decline on “greater than anticipated pressure” from big promotions to a calendar shift that will result in Labor Day being a scheduled a week later this year. On Aug. 5, Zumiez revised its guidance for its second quarter. Brooks said its diluted earnings per share would be slightly below the previously announced guidance of $0.12.

The Buckle Inc., a Kearney, Neb., retailer, announced an 8.1 percent decline in its same-store sales.

A bright spot in July sales was reported by L Brands Inc., the parent company to Victoria’s Secret and Bath & Body Works. The Columbus, Ohio–headquartered company’s same-store sales increased 3 percent in July. Net sales were $759.5 million in July. It was an increase of 3 percent compared with $735.3 million reported in the same time the previous year.

On Aug. 6, L Brands increased its second-quarter earnings guidance to $0.66 to $0.68 per share compared with the previous guidance of $0.60 to $0.65 per share. Gap Inc., a dominant specialty retailer, is scheduled to report its July sales on Aug. 10.