Skip navigation
Watchlist Sponsored By :

Current DateTime: 09:11:51 10 Jul 2009
LinksList Documentid: 24355697
  • Highest Grossing Movies

      What are the highest grossing movies of all time, adjusted for inflation? Click ahead to find out!

  • Most Expensive Places To Live

      Each year, Mercer Consulting assembles its ranking of the most expensive places to live. Mercer compiles information from 143 cities worldwide.

  • Recession-Resistant US Cities

      Some cities have been hit much harder than others during the recession. Here are the metro areas faring the best.


Current DateTime: 09:11:51 10 Jul 2009
LinksList Documentid: 24890560
  • Boom, Bust and Blame

      The inside story of the economic crisis that has gripped the entire world.

  • E3: Gaming's Cutting Edge

      North America's premier computer and video game trade show draws tens of thousands of professionals to experience the future of interactive entertainment.

  • The Fall of GM

      A look into the fall of General Motors as the automaker heads toward bankruptcy and an effective nationalization.

By: CNBC.com | 12 Jul 2007 | 07:00 PM ET
Text Size

Steven Senne / AP
Many retailers, including Macy's, reported a decline in June sales.

Retailers, including industry leader Wal-Mart Stores, reported June sales that topped Wall Street's lowered expectations on Thursday, raising hope for the back-to-school shopping season.

As merchants reported their June sales results Thursday, disappointments cut across many segments of the industry including Macy's, AnnTaylor Stores and trendy apparel chain Bebe Stores. But there were notable exceptions, such as Wal-Mart Stores [WMT  Loading...      ()   ], whose renewed emphasis on low prices helped drive sales gains above analysts' expectations.

"Retail sales are generally soft as we expected. Consumers look like they are holding back on discretionary purchases particularly in apparel," said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass.

He added that shoppers are "facing a long list of headwinds as they head into the rest of the summer."

According to Thomson Financial's latest sales tally, 12 retailers beat results, while 16 merchants missed projections. The sales tally is based on same-store sales, or business at stores open at least a year. They are the industry standard for measuring a retailer's health.

Retailers of what are known as discretionary merchandise such as apparel and home goods are coming under increasing pressure as consumers are forced to pay more for food and gasoline. The still-weakening housing market is also making shoppers shy about spending. But retailers have problems of their own, including a continuing absence of must-have fashions; this season's clothes, including baby doll style blouses, has not clicked with many women.

Wal-Mart, the world's largest retailer, had a 2.4% gain in same-store sales, beating the 0.8% predicted by analysts polled by Thomson Financial. The company said its aggressive price reduction strategy helped boost results, and it promised more aggressive price cuts for the back-to-school season.

"Consumers continue to be challenged financially, with more pressure on discretionary spending," said Eduardo Castro-Wright, Wal-Mart Stores U.S. president and chief executive officer, in a statement. "Gas prices have moved to be their chief concern in our latest survey and they appreciate the opportunity to save on everything."

  June Same-Store Sales Expectations
CompanyRise in Same-Store SalesThomson Financial Estimate
Wal-Mart Stores+2.4%-0.8%
Target+3.3%+3.3%
Macy's-2.1%-0.8%
JC Penney-1.5%-3.6%
Kohl's+3.0%-2.4%

The company said that as in the past four months of its fiscal year, grocery sales continue to be stronger than general merchandise. One exception was the entertainment category; flat-panel televisions, MP3 players and video game hardware enjoyed stronger gains compared to a year ago. Still, Wal-Mart continues to struggle with weak sales in its home and apparel areas.

Meanwhile, Costco Wholesale [COST  Loading...      ()   ] reported a 6% gain in same-store sales, in line with the 6.1% estimate.

"At this point, really, the mall traffic has actually been down, particularly over the summer,” said Adrienne Tennant, an analyst at Friedman Billings Ramsey, on CNBC's "Squawk Box." “That is definitely a concern.”

According to Tennant, the weakest area has been the “misses” sector, which is apparel for women ages 35 to 55 years old. Ann Taylor, Chico’s, Talbots, and Coldwater Creek are among the retailers hurt by this trend, Tennant said.

Retail Stocks
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...

AnnTaylor suffered an 8.4% drop in same-store sales, dragged down by its lower-priced Loft division. Analysts expected a 4.7% decline.

Meanwhile, Chico's same-store sales tumbled 7.3%, or far worse than the 2.2% decline analysts had predicted.

Macy's suffered a 2.7% drop in same-stores sales, worse than the 0.8% decline expected.

J.C. Penney had a 1.5% decline in same-store sales in its department store business, less than the 3.6% analysts expected. The retailer said sales picked up toward the end of the month, reflecting a strong initial response to back-to-school merchandise.

Limited Brands had a 3.0% gain, slightly better than the 2.9% forecast.

Retailers who appeal to teens have been among the strongest performers. These include both Zumiez and American Eagle. Both trounced analyst estimates and posted strong same-store sales growth.

Teen Retailers
Loading...
Loading...
Loading...
Loading...

There were exceptions. Bebe posted a 5.4% drop in same-store sales, worse than the 2.2% projected decline. But Pacific Sunwear of California posted a 4.5% same-store sales increase, better than the 3.2% estimate.

Abercrombie & Fitch also topped Wall Street's expectations reporting a 2% increase in June sales at stores open at least a year, rather than the 3.2% decline analysts were expecting.

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon


Current DateTime: 08:26:52 10 Jul 2009
LinksList Documentid: 29778428

Current DateTime: 01:04:09 10 Jul 2009
LinksList Documentid: 29779196

Current DateTime: 07:29:15 10 Jul 2009
LinksList Documentid: 29779199

Current DateTime: 01:04:09 10 Jul 2009
LinksList Documentid: 29779198
CNBCCNBC
About CNBC  |  Site Map  |  Privacy Policy  |  Terms of Service  |  Video Reprints  |  Advertise  |  Help  |  Contact
Partners: AOL Money  |  BloggingStocks.com
CNBC is a Division of NBC Universal
  Data is a real-time snapshot *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
Thomson ReutersThomson Reuters