Easy comparisons and relatively favorable weather helped increase same-store sales in the typically weak month of October for retailers, up 1.8% from the year-earlier level but below the 2% growth expectation. Results for this series, which tracks data for stores open at least a year from 30 major retailers, had come ahead of expectations the last two months.
As a result of the financial crisis last fall, conditions were extremely bad in October of last year, when retail sales were down 4.1%.
October is typically a weak month for retailers, sandwiched as it is between the active shopping periods of back-to-school and the holiday season. The monthly sales numbers do not include data from Wal-Mart ([url=http://www.zacks.com/stock/quote/wmt]WMT[/url]), which stopped giving monthly sales numbers earlier this year.
Results were mixed among the major retail categories, particularly department stores and teen retailers. Sales at Macy’s ([url=http://www.zacks.com/stock/quote/m]M[/url]) and JC Penney Co. ([url=http://www.zacks.com/stock/quote/jcp]JCP[/url]) were down 0.8% and 4.5% from last year’s levels, respectively, coming in below expectations. Nordstrom’s ([url=http://www.zacks.com/stock/quote/jwn]JWN[/url]) sales came in better than expected.
Among teen retailers, Ambercrombie & Fitch Co. ([url=http://www.zacks.com/stock/quote/anf]ANF[/url]) posted weaker-than-expected results, with same-store sales down 15%. Results were also weak at American Eagle Outfitters ([url=http://www.zacks.com/stock/quote/aeo]AEO[/url]) and Zumiez Inc. ([url=http://www.zacks.com/stock/quote/zumz]ZUMZ[/url]). Sales at some other teen retailers, such as Buckle ([url=http://www.zacks.com/stock/quote/bke]BKE[/url]), came in ahead of expectations.
Among discounters, Costco ([url=http://www.zacks.com/stock/quote/cost]COST[/url]) had strong numbers, beating expectations; while Target’s ([url=http://www.zacks.com/stock/quote/tgt]TGT[/url]) 0.1% decline was below the flat-results. Walgreen Co. ([url=http://www.zacks.com/stock/quote/wag]WAG[/url]) reported strong same-store sales numbers, maintaining its momentum from the previous month, while Rite Aid ([url=http://www.zacks.com/stock/quote/rad]RAD[/url]) continued to struggle.
While the economy has come out of the recession, the consumer is still hard pressed, given the dismal labor market and continued housing overhang. With another employment report due tomorrow -- and expectations of around 170,000 jobs lost in October -- any meaningful improvement in the retail scene will have to wait a turnaround in the labor market.
The saving grace for retailers in their fiscal third quarter results (typically ends October 30th) is the relatively easier comparison with the extremely bad 2008.