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June Sales Coming in Hit and Miss For U.S. Retailers

Date : 07/05/2012 @ 8:33AM
Source : Dow Jones News
Stock : Costco Wholesale Corp. (MM) (COST)
Quote : 139.64  0.38 (0.27%) @ 8:10PM
Costco Wholesale Corp. (MM) share price Chart

June Sales Coming in Hit and Miss For U.S. Retailers

Costco Wholesale Corp. (MM) (NASDAQ:COST)
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   By Karen Talley and Victoria Stilwell 
 

U.S. retailers are turning in mixed results for June, as momentum that was seen earlier in the year has waned.

The less robust sales growth appears in part to be the result of warm weather purchases being made earlier than usual this year because of the unseasonably warm winter.

June also saw mixed weather and even steep promotions during the month did not bring out consumers in droves, which meant that at least some summer wear languished on shelves. There have also been signs of stress in the economy.

"Last year, weather broke late and June benefited from pent up demand," said Daniel Binder, retail analyst at Jefferies. "This has created a tougher comparison especially since weather broke earlier in the year."

Costco Wholesale Corp. (COST), a barometer of goods ranging from food to apparel, reported U.S. same-store sales excluding fuel rose 3%, when 3.5% was expected. The company said it was hurt by the timing of Independence Day, given last year the holiday fell on the first Monday of the July reporting period and pre-holiday shopping was captured in June. Costco said regions with the strongest sales included the Midwest and Northwest.

But Limited Brands Inc. (LTD) continued its streak, with the operator of Victoria's Secret and Bath & Body Works posting June same-store sales growth of 7%, more than double expectations for a 2.4% gain. The company's Victoria's Secret direct sales segment swung to a comparable store sales gain as other divisions including Bath & Body Works and Limited Brands saw smaller increases than the same period last year.

The 18 retailers tracked by Thomson Reuters are expected to report a 2.4% gain in June same-store sales, the smallest monthly growth in almost three years and compared with 7.7% growth a year ago. The retailers are up against the most difficult comparison in nearly five years.

Department store Stage Stores Inc. (SSI) reported a 3.3% increase in comparable-store sales when 2.7% was expected. The company said sales were broad based, with cosmetics, footwear, home and gifts and men's categories exceeding the company average. Geographically, the Northeast, South Central, which includes Texas, and Southwest regions outperformed, the company said.

Teen retailer Buckle Inc. (BKE) posted its first same-store sales decline in two-and-a-half years, with its 2.5% decline coming in worse than the Street's expectations for sales to be flat.

Write to Karen Talley at karen.talley@dowjones.com



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