Retailers are delivering strong sales numbers for August,
boosted by back-to-school buying, with Limited Brands Inc. (LTD)
and Costco Wholesale Corp. (COST) among the standouts.
Limited Brands reported same-store sales rose 8%, almost twice
the 4.2% that was projected and continued a streak of outdistancing
expectations. The retailer was helped by strong August sales the
Victoria's Secret chain.
Costco posted a 6% rise in U.S. same-store sales minus gasoline
when 5% was expected.
The 17 retailers that report monthly same-store sales are
expected to show 4.1% growth, according to Thomson Reuters. The
figure compares with 4.9% last year.
Buckle Inc. (BKE) reported a 4.5% rise in same-store sales when
a 0.3% drop was expected.
Fellow teen retailer Wet Seal Inc. (WTSLA), which analysts said
has been missing on fashion trends, posted an 18.3% decline in
same-store sales, when a 17% drop was expected. Wet Seal said in a
statement the results were in line with its expectations and that
since the start of August, the company has returned to "fast
fashion merchandising and has included merchandising to a broader
demographic."
Teen retailers are a good proxy for back-to-school spending, but
only a sampling of the group still report same-store sales on a
monthly basis so it is hard to get a true read. In general, teens
have been drifting toward fashion and lifestyle brands and away
from wardrobe basics. "It's a move to the branded surf, skate, and
street fashion and to key fashion looks, typified by the bright
palette and colored denim," said Richard Jaffe, retail analyst at
Stifel Nicolaus.
Average back-to-school spending for a person with school-age
children is projected to jump to $688 this year, according to a
National Retail Federation survey last month. That is up from $603
in last year's survey.
Stage Stores Inc. (SSI) may have foreshadowed what is to come
from other department stores. The regional chain, which operates
chains in generally smaller locales in the U.S., reported a
comparable-store sales rise of 6.5%, more than twice expectations
for 3%. "Healthy back-to-school selling, strength in our missy and
other women's categories and strong full-price selling helped
produce our highest comparable-store sales increase for the month
of August since 2004," said Chief Executive Michael Glazer.
"We feel good about our merchandise assortments, inventory
levels and positive momentum heading into the important fall
season," Glazer said.
The strong showing comes despite word this week that consumer
confidence for August slumped to its lowest level of the year.
"Households continue to worry about a difficult job market, the
European debt crisis, the upcoming "fiscal cliff," and the
political wrangling in Washington and in the presidential
campaign," says Steven Wood, chief economist at Insight
Economics.
Write to Karen Talley at karen.talley@dowjones.com
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