Tickers in this Article: JWN, SKS, M, JCP, ROST, COST, TJX, LTD, BKE, GPS
Even in the face of a down economy, worried consumers contributed to a solid August retail performance. An International Council of Shopping Centers survey of 26 retailers found revenue up 4.6% for the month. This is in line with predictions made prior to the month's negative economic events.

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A Confluence of Negatives Faced
Consumers faced a battery of things that were going wrong last summer, including some ongoing problems that lingered. The oldest had to be housing worries, with unemployment concerns still looming also. Added to this, the headlines were filled with frightening economic news, such as the U.S. debt downgrade, as well as the specter of a global economic slowdown or even a recession and the stock market's wild gyrations. Throw in Tropical Storm Irene on top of this. Higher prices for consumer goods no longer lurked in the background, but emerged in the open, as companies passed along their rising input costs. Yet into this bleak picture, consumers stepped in and spent during August. (For related reading on retail, see The 4 R's Of Investing In Retail.)

A Spectrum of Results
The August report included a broad group of retailers, though not all retailers reported. Some big names as well as some discounters weren't on the list. Of those that were, luxury retailers Nordstrom (NYSE:JWN) and Saks (NYSE:SKS) did well. Saks had strong sales in handbags, men's clothing and shoes, which drove revenue up 6.1% for its same-store sales. This was less than the estimates of 7%, however. Fashion jewelry, fragrances and cosmetics were categories that also did well. Overall, revenue rose 5.5% to $168 million. Nordstrom did even better, with a 6.7% gain, beating the estimate of a 4.8% rise in sales. Its full-line stores were up 7.7%, while its rack stores gained 3.3%.

On the department store front, Macy's (NYSE:M) same-store sales rose 5%, which the company said would have been 1.5% higher except for the effect of Tropical Storm Irene. Some of Macy's largest-volume stores were closed for all or part of the Saturday the storm hit. Online sales were up 35.5% in August. J.C. Penney (NYSE:JCP), on the other hand, slipped 1.9% as back-to-school sales were hit by the tropical storm.

Some discounters did report, among them Costco (Nasdaq:COST), which grew same-store sales by 6%. Although gasoline sales are excluded from same-store sales, gas sales and other sales due to the tropical storm actually increased, adding to a 17% overall rise in revenue. Ross Stores (Nasdaq:ROST), with its discount apparel, added 4% to its same-store sales with particular strength in the Florida market.

Another discount apparel chain, TJX (NYSE:TJX), ended with a 1% gain as the company said sales were doing better until the tropical storm hurt results. In other apparel chains, Limited Brands (NYSE:LTD) and Buckle (NYSE:BKE) did especially well, notching 11% and 8.3% gains, respectively, while Gap's (NYSE:GPS) same-store sales fell by 6%. Limited's Victoria's Secret drove its results, while Buckle's stores were largely not in the tropical storm area.

The Bottom Line
Although some mixed results are in the early returns on August sales, the retail numbers have to be considered fairly good, especially in light of the harrowing economic news that formed the backdrop. While it's also true that the back-to-school season features a lot of back to basics, and includes necessity spending of getting kids the stuff they need for the school year, the numbers still show some pretty brisk shopping by consumers. It's unclear whether this brisk shopping will continue into the fall, or whether weary consumers will retreat. (For related reading, see Best Back-To-School Deals.)

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