Retail Sales Prep: Back-to-School Edition

Which retailers are heading to the top of the class this back-to-school season?

Gap jeans
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Gap jeans

Discounters and department stores are expected to make the grade, logging the biggest increase in monthly same-store sales when retailers report their results on Thursday. Price conscious-consumers looked to this sector for one-stop shopping as they stocked up on school supplies and clothing.

Overall, the Thomson Reuters Same-Store Sales Index is expected to rise 2.5 percent in August, the research firm said.

Retailers are courting a very cautious consumer. That was underscored by MasterCard's SpendingPulse report released earlier Wednesday. Although that data showed an uptick in retail spending in August, shoppers once again appeared to be sticking to the basics and spending on essentials such as children's clothing. Sales in other categories, including women's and men's apparel and luxury goods, fell, the report said.

But within these trends, some retailers are doing better job winning consumer dollars. Macy's , for example, has wooed teenagers with exclusive brands such as Material Girl, a clothing line developed by Madonna's daughter Lourdes.

But some teen retailers are struggling. Based on analysts' estimates the Buckle is expected to turn in the weakest performance with same-store sales expected to fall 6.5%.

Investors will be looking to see what comments the retailers make about the coming month.

More than one-third of the states held sales tax holidays in August, including three large states that did not have this kind of event last year. It remains to be seen whether those purchases boosted August sales at the expense of sales in September.

Warm weather also may have hampered sales of fall clothing as record-high temperatures persisted in much of the country, but the heat may have helped to clear out discounted summer inventory. If warm weather persists into September, fall sweaters and jackets may need to be discounted to move these items out the door.

Shoppers have been looking for deals, and many may have been waiting to snag better prices after Labor Day.

Retailers are likely hoping that the fall brings more clarity about the economy and an improved employment picture. Meanwhile, investors will be looking at August sales for the lessons they may teach about the upcoming Christmas holiday season.

One thing that isn't up for debate: the bar will be raised in the months ahead as retailers will be facing much tougher comparisons with their year-ago performance beginning in September.

A list of analysts estimates for August same-store sales follows:

August Same-Store Sales Estimates

August 2010 Estimates
August 2009 Actuals
Costco Wholesale (excluding gas) 3.6% 0.0%
BJ Wholesale (excluding gas) 2.4% 2.2%
Target 2.0% (2.9%)
JC Penney 1.6% (7.9%)
Kohl's Department Store 2.6% 0.2%
Dillards Department Store (0.5%) (12.0%)
JW Nordstrom 5.9% (7.6%)
Saks Department Store 4.3% (19.6%)
Stage Stores 1.3% (9.5%)
Macy's 4.0% (8.1%)
Gap (0.2%) (3.0%)
TJX 2.4% 5.0%
Limited 7.3% (4.0%)
Ross Stores 2.9% 6.0%
Stein Mart Breakeven (8.9%)
Abercrombie 5.9% (29.0%)
American Eagle 1.1% (7.0%)
Aeropostale 1.2% 9.0%
Hot Topic (6.2%) (8.1%)
Wet Seal (3.5%) (11.2%)
The Buckle (6.5%) 3.6%
Zumiez 7.7% (12.1%)
Walgreen 2.4% 1.9%
Rite Aid (1.0%) (1.9%)
Source: Thomson Reuters; Figures in parenthesis are losses.

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