Costco and L Brands shine in August; Gap disappoints

New York -- Costco Wholesale Corp. and L Brands Inc. were among the retailers that posted stronger-than-expected sales in August, fueled in many cases by back-to-school promotions.

Costco led the pack, reporting a 7% gain in August total same-store sales, ahead of views for a 4.9% gain. U.S. same-store sales, excluding the negative impacts from gasoline price deflation and foreign exchange, rose 7% as well. Top-performing categories at Costco included housewares, small appliances, apparel, fresh foods and food sundries.

L Brands reported a 5% increase in August same-store sales, topping estimates for a 2.8% gain. The growth was led by a 5% increase in sales at Victoria's Secret.

Gap Inc., however, posted disappointing results, as same-store sales fell 2% from year-earlier levels, missing analyst expectations of a 1.6% rise. By brand, Banana Republic global same-store sales declined 2% and Old Navy global same-store sales increased 2%, compared with expectations of increases of 0.7% and 3.4%, respectively.

"We're encouraged by the positive momentum at Old Navy, while focused on the necessary steps to drive improved performance across our portfolio of brands in the back half," said CEO Glenn Murphy.

In other same-store results for August:

• Cato reported a 3% increase, above expectations.

• Stein Mart posted a 2.5% increase in same-store sales for the month, short of views for a 3% gain.

• Walgreen's sales rose 3.7%, missing analyst expectations.

 

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