Retailers Report Sluggish Sales in August
New York City Many U.S. retailers struggled with a sluggish back-to-school season this August, though some discount and wholesale companies fared well as shoppers focused on buying essentials and in bulk.
Wal-Mart Stores Inc. reported a solid gain, but mall-based apparel stores, including teen merchants such as Wet Seal Inc. and Abercrombie & Fitch Co., reported dismal results. High-end retailers Saks Inc. and Nordstrom Inc. also posted weaker results as their affluent customers start to feel pinched.
Wal-Mart reported a solid 3% gain in same-store sales, helped by sales of groceries and back-to-school products. Including fuel, the retailer's total same-store sales rose 3.5%.
"The underlying business performance for Wal-Mart U.S. continued to show strength and the improved relative performance has resulted in market share gains," Eduardo Castro-Wright, the president and CEO of Wal-Mart's U.S. stores, said in a statement.
Wal-Mart expects same-store sales to rise 2% to 3% in the current month.
Target Corp.'s same-store sales fell 2.1%, though that was better than the 2.6% decline that Wall Street expected.
Another bright spot is warehouse-club operators, as shoppers buy in bulk to save money. Costco Wholesale Corp. announced a 9% same-store sales increase in August on Wednesday as higher gas prices boosted sales. Excluding the effect of higher gas prices, Costco's U.S. same-stores sales rose 6%.
Among luxury department stores, Saks recorded a 5.9% drop in same-store sales, steeper than the 4.7% decline that Wall Street expected. The weakest categories were women's apparel, women's shoes and intimate apparel, while the strongest categories were fashion jewelry, fragrances, men's sportswear and men's shoes.
Nordstrom recorded a 7.9% drop in same-store sales, a bit worse than the 7.1% decline expected.
Gap Inc. recorded an 8% drop, though it was less steep than the 9.7% decline projected by Wall Street. Meanwhile, Limited Brands suffered a 7% drop, mostly in line with the 6.9% decline estimated from Wall Street.
Business at teen merchants was disappointing. Abercrombie & Fitch suffered an 11% drop in same-store sales, worse than the 7.9% decline expected. Wet Seal recorded an 8.7% drop in same-store sales, as demand at its Arden B stores dropped.
Pacific Sunwear of California Inc.'s same-store sales fell 6%, though it was smaller than the 8.8% decline projected by Wall Street.