Kohl’s, J.C. Penney and Macy’s beat forecasts
New York City Department store retailers continued to show strength in August, with Kohl’s, J.C. Penney and Macy’s all beating analysts expectations.
At Kohl’s Corp., same-store sales rose 4.5% in August on strong sales of home and men’s merchandise, and footwear. The results topped analysts estimates of a 2.6% increase.
Year-to-date, same-store sales climbed 5.7%, and total revenue improved 9% to $9.55 billion.
Macy’s said its same-store sales rose 4.3% in August as back-to-school shoppers flocked to its stores. It results were better than the 4% gain anticipated by analysts surveyed by Thomson Reuters.
Total revenue for the month rose 6.2% to $1.64 billion, up from $1.54 billion, a year earlier.
Chairman and CEO Terry Lundgren said back-to-school business has been strong, thanks in part to robust sales of Madonna’s new clothing line, Material Girl, and its largest private brand in juniors and young mens, American Rag.
“We are particularly encouraged by the response from our customers to new fall fashion,” he said in a statement.
For the year to date, Macy’s sales totaled $12.749 billion, up 7.1% from $11.905 billion in the first 30 weeks of 2009. Year-to-date same-store sales were up 5%.
Online sales (Macys.com and Bloomingdales.com combined) were up 22.2% in August and 29.8% year to date. (Online sales are included in the same-store sales calculation for Macy’s)
J.C. Penney Co. also did better than expected in August. The company reported a 2.3% increase in same-store sales, with strongest results from men’s and children’s apparel. Analysts, on average, had expected same-store sales to rise 1.6%.
J.C. Penney’s new exclusive kids apparel brands, Uproar and Supergirl by Nastia, performed well. And overall sales were robust in key categories such as tops, back packs and denim in junior’s and young men’s. J.C. Penney also said that sales were “solid” for its fast fashion brand MNG by Mango. It installed Mango departments in 77 stores so far and plans to have 600 by this time next year.
Geographically, the southeast and southwest regions were the best performing regions in August, the company said.
J.C. Penney’s total sales for the four weeks ended August 28 rose 0.8% to $1.44 billion.
In other department store same-store results for August:
- Nordstrom reported a 6.3% gain, better than the 5.9% increase forecast by analysts. Jewelry, dresses and women’s shoes were among the best sellers during the month. Sales in the South, Mid-Atlantic and Midwest regions were the strongest while Southern California was weaker.
- Saks said Thursday its revenue in stores open at least a year rose 1% in August as lower clearance inventory hampered sales. Analysts surveyed by Thomson Reuters had expected the figure to rise 4.3%
- Dillard’s said Thursday that revenue in department stores open at least one year was flat in August, better than the decline analysts expected.
- Bon-Ton Stores said Thursday that revenue in its stores open at least a year fell 4.6% in August as hot weather hurt sales of early fall merchandise.
Report: Small uptick in August sales
A report released Wednesday by MasterCard Advisors found that, in August, sales in most categories recorded a slight year-over-year uptick compared to the year-over-year performance of July.
According to the SpendingPulse report — based on aggregate sales activity in the MasterCard payments network, coupled with survey-based estimates for all other payment forms, including cash and check — some categories were boosted by back-to-school spending.
“Categories such as apparel and electronics appear to have been helped by the back-to-school season, which tends to peak in August, although some spending in apparel can be pushed back into September as parents delay purchasing fall and winter clothing until cooler weather conditions set in,” said Michael McNamara, VP research and analysis for SpendingPulse.
In addition, he said, the hot and dry conditions in August helped the overall restaurant sector while the continued volatile financial markets performance negatively impacted the luxury sector and, to a lesser extent, the jewelry sector. Tax-free weekends in Florida, Illinois and Massachusetts boosted results as well. “As a result, year-over-year comparisons in electronics, office supplies and apparel benefited,” he said.
Total U.S. apparel sales was back in positive territory in August, up 2.6% year-over-year, following July’s 1.1% decrease. This category, on a year-over-year basis, has been up five out of eight months this year. All sub-sectors except for women’s apparel and men’s apparel posted increases, with the children’s category up a solid 8.4% year-over-year, and family apparel up 4.1%. Footwear posted a modest increase of 0.9%. Following July’s sharp decline, men’s apparel was down only 1.9% in August, while women’s apparel, down 1.9% in July, slipped a little further in August, declining 2.7% year-over-year.
Consumer electronics and appliances showed increases on a year-over-year basis. While the consumer electronics category was up 2.3%, the appliances category recorded a 9.4% increase.
E-commerce sales growth slowed in August to 7.2%, which although well into positive territory, was the smallest year-over-year increase in 2010.
Costco takes stand on on supplier treatment of animals
ISSAQUAH, Wash. Costco has commented on video showing the mistreatment of some young animals saying: “The company had not been aware of the issue before we saw the video. We are extremely disappointed, not only with the performance of our supplier in this instance, but with our own performance as well. We hold ourselves to a high standard, and in this case, we plainly did not perform to that standard.”
Costco said it is in the process of developing a more definitive written policy to make clear its long-standing position that any type of cruel treatment of animals is unacceptable. All of Costco’s suppliers are aware that Costco insists upon ethical treatment of all animals involved in producing products for sale in its warehouses, without exception, the company said. Costco said it has an inspection program to ensure that its suppliers are in compliance with its standards, but in this case that inspection program did not uncover the problem. The company said it takes full responsibility for this error. It will increase its vigilance in the future to see that its policies are adhered to by all of Costco’s suppliers, the company reported.