Retail Sales Prep: Retailers Hitting a Rising Bar
A late burst of back-to-school shopping will likely help sales at U.S. retail chains in September, according to the latest analyst forecasts.
According to a Thomson Reuters survey, sales at stores open at least a year are expected to rise an average of 2.1 percent in September from the year-earlier period.
Strength in the sales will be most concentrated at discounters and department stores, according to the estimates, as consumers continue to look to stretch their money and reduce the number of trips they are taking to stores.
The results are encouraging because retailers are beginning to face more difficult comparisons with the year-ago period.
But if the MasterCard Advisors' SpendingPulse reportis any indication, the trends should be watched closely. Consumers continue to be very cautious with their spending, and the back-to-school shopping patterns were choppy.
A late end to the back-to-school shopping season is consistent with what we have seen in recent years, and it reflects the fact that shoppers are no longer willing to buy clothes months ahead of when they will wear them.
Also, sales of men's and women's clothing are likely to remain weak, as consumers are only buying the items they most need, and then they are looking for discounts.
Beyond the necessities, teens were looking for unique fashion items this season that make them a "must have" to update a wardrobe, said Needham & Co. analyst Christine Chen said in a recent research report.
"Value is important, but once again that does not mean lowest price, rather that the item must be worthy of its price tag, due to fashion and/or quality," Chen said.
Retailers such as Target, Macy's, Abercrombie & Fitch and Gap are expected to report their results on Thursday morning.
A list of analysts estimates for September same-store sales follows:
September Same-Store Sales Estimates
|Retailers||September 2010 Estimates||September 2009 Actuals|
|BJ Wholesale (excluding gas)||1.2%||5.5%|
|Kohl's Department Store||3.2%||5.5%|
|Dillards Department Store||Breakeven||(6.0%)|
|Saks Department Store||5.0%||(11.6%)|
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