Retailers Ring Up Weakest Growth in Three Years
By: JC Penney suffered a 4.6 percent drop in same-store sales, well below analysts' 0.1 percent forecast. The company slashed its third-quarter earnings forecastto $1.00 to $1.04 per share, compared to the previous guidance of $1.28.
Some Teen Retailers Shine
Perhaps the best performance came from teen retailersZumiez and Buckle.
Zumiez, which has an active, sporty image, has been successful in outpacing estimates for several straight quarters. In the latest period, the company posted impressive same-store sales growth of 13.9 percent. Analysts were estimating the retailer would report an increase of 6.6 percent.
Meanwhile, Buckle said same-store sales rose 10.9 percent, compared with the 2.0 percent average analyst estimate.
But it was not all good news at with the teen retailers. Wet Seal sales fell 7 percent. The company also cut its earnings forecast.
Costco Wholesale fared better. It reported a better-than-expected increase in quarterly profit on Wednesday, helped by improved margins. The No. 1 U.S. warehouse club operator said September sales at stores open at least a year were stronger than Wall Street forecasts.
The September sales results marked a rebound from August, when Costco reported weaker-than-expected sales, hurt by a decline in store traffic that it attributed to extremely high temperatures in California.
September Same-Store Sales Forecasts
| Retailers | September 2008 Actual Sales | September 2009 Estimated Sales |
|---|---|---|
| Costco Wholesale | 7.0% | (0.07%) |
| BJ's Wholesale | 10.4% | (1.0%) |
| Target | (3.0%) | (2.0%) |
| JC Penney | (-12.4%) | (-3.5%) |
| Kohl's | (-5.5%) | 0.1% |
| Dillards | (12.0%) | (9.8%) |
| JW Nordstrom | (9.6%) | (6.0%) |
| Saks | (10.9%) | (11.1%) |
| Macy's | (4.6%) | Not reported |
| Gap | (11%) | (0.4%) |
| TJX | (1.0%) | 4.1% |
| Limited | (6.0%) | (2.4%) |
| Abercrombie | (14.0%) | (21.0%) |
| Children's Place | 0.0% | (1.3%) |
| Aeropostale | 5.0% | 12.4% |
| Hot Topic | (1.8%) | (6.3%) |
| The Buckle | 19.7% | 5.8% |
| Zumiez | (9.0%) | (1.0%) |
It's not a huge surprise that weak September sales are hurting third-quarter earnings. About 40 percent of third-quarter sales are rung up in September, making it the largest and most important month of the period, Augustine said.
The latest round of sales reports will likely weigh heavily on those attempting to gauge the health of the economy.
“We have been expecting that we would be seeing greater signs of weakness as we push into the fourth quarter,” Badillo said.
Christina Cheddar Berk is a news editor at CNBC.com. She can be reached at Christina.cheddar-berk@nbcuni.com.
