Retailers report mixed sales results in May
New York City May brought mixed sales results for retailers, with early reports on Thursday suggesting an erratic recovery in consumer spending during a seasonally weaker period of shopping. Based on reports of 11 retailers out of 28 tracked by Thomson Reuters, 60% came in ahead of expectations, while 40% fell short.
A Memorial Day holiday that fell on the last weekend of the month probably dragged sales down by a low- to mid-single-digit percentage rate, with more shopping pushed into June, analysts said. Also, cooler weather everywhere but the Northeast, as well as heavier rain in the Northwest, hurt sales of summer apparel.
Among apparel retailers, Limited Brands said May same-store sales rose 5%, easily topping the 2.1% gain analysts had forecast. The company reported net sales of $657.3 million for the four weeks ended May 29, compared with $618.7 million last year.
The Buckle, a high-flyer during the recession, reported that its same-store sales fell 5.4% in May, while analysts expected a slight rise. Total revenue for the four weeks ended May 29 fell less than 1% to $60.3 million, from $60.6 million last year.
At Gap, same-store sales rose 1%, better than the 0.6% gain forecast by Wall Street analysts and last year’s 6% decline. Net sales for the four-week period ended May 29, rose 2% to $1.05 billion.
Aeropostale’s same-store sales were up 1% in May. Total net sales for the four-week period ended May 29, increased 7% to $141.6 million.
The retailer said that its results for the month include a negative impact due to the Memorial Day calendar shift. It also stated that its merchandise margins for the month increased significantly over last year, and inventories remain well controlled and on plan.
In other same-store sales results for May:
- American Eagle Outfitters’ sales fell 3%. Wall Street analysts expected a decrease of 2.5%, according to a survey by Thomson Reuters. Total sales dipped 1% to $193 million.
- Abercrombie & Fitch said its sales fell 3%, greater than the forecast for a dip of 2.3%. Total sales rose 10% to $198 million.
- Cato said its sales increased 3%. It reported sales of $80.9 million for the four weeks ended May 29.
- Wet Seal’s sales fell 5.3% in May, a slightly smaller drop than analysts expected. Total sales for the four weeks ended May 29 fell 4% to $40.2 million. Sales fell 4.6% at namesake stores and dropped 7.8% at Arden B.
Fire up some savings
As it has become more challenging for retailers to demonstrate value on leading brands, one of Target’s favorite strategies is the $5-gift-card offer when shoppers purchase two or more featured items. While it’s a nice bonus to get $5 for free on items shoppers purchase regularly, this week’s “wow” item is a Brinkman-brand gas grill featured in the retailer’s circular. Available in red or stainless steel, shoppers can receive a $100 gift card for purchasing the $329 product with free assembly. The allure of $100 makes the prospect of purchasing the grill much more compelling.
Target wins again, but who saw it?
Brand Target scored a victory this weekend at the Indianapolis 500, when Dario Franchitti took the checkered flag for Target Chip Ganassi Racing. Franchitti led 155 of the race’s 200 laps to claim his second Indianapolis 500 victory. Not only did the Target sponsored car win the race, but the other car Target sponsors, driven by Scott Dixon, finished in fifth place. That’s great news from a competition standpoint, but unfortunately from a marketing standpoint the Indianapolis 500 is not platform for marketing communications it once was. Interest in the event continues to wane as numerous empty seats were visible in the stands throughout the race. And from the standpoint of television viewers, there is nothing worse or more boring that when a driver leads from wire to wire as was practically the case with Franchitti’s dominant showing.