(Recasts first paragraph to include industrywide figures from
Thomson and updates with analyst reaction and stock prices.)
DOW JONES NEWSWIRES
Retailers in September collectively posted their first growth in
same-store sales since August 2008, with positives reported across
an industry mired in a several-year slump.
The September showing prompted a number of retailers, including
Target Corp. (TGT), J.C. Penney Co. (JCP) and Kohl's Corp. (KSS) to
issue optimistic earnings outlooks. Meanwhile, Victoria's Secret
parent Limited Inc. (LTD) reported its first same-store-sales
increase since August 2007.
But not is all well, as the year-to-year comparison benefited
from factors including a later start for many schools and weakness
last year, making the ability to show growth much easier than had
been the case throughout 2009.
Still, September may have seen some of the much talked about
"pent-up demand" being released by consumers after they have
hunkered down during one of the worst recessions on memory.
"We like to shop in America," said Craig Rowley, global leader
for retail at consulting firm the Hay Group. "And there is some
sentiment on the part of the consumer that the worst of the
economic downturn is over."
Retailers have been suffering for more than a year as consumers
have continued to be less free with their spending. But starting in
September, comparisons with year-earlier results became notably
easier.
Thomson Reuters' same-store-sales index rose 0.6% for September.
With that increase, the industry avoided what would have been the
first time this decade that the same month had two straight years
of same-store sales decline.
Teen-apparel chains, which were projected to be the worst
performer as a group, had the biggest outperformance as same-store
sales fell 2.8%. That is less than half the drop that was
expected.
Abercrombie & Fitch Co. (ANF) was again the weakest
performer, but its 18% slump for September was a bit less than
expected. The company has recorded big declines for months as
price-conscious shoppers instead go to cheaper rivals like
Aeropostale Inc. (ARO). It had a 19% surge, prompting the company
to increase its fiscal third-quarter profit target. American Eagle
Outfitters Inc. (AEO) also projected earnings at or above its prior
forecast.
The trio saw their stocks rise on the news.
Department stores also showed improved performance, with Macy's
Inc. (M) posting an 2.3% drop - half of what analysts estimated -
while struggling smaller peer Dillard's Inc. (DDS) also had a
narrower-than-expected decline. J.C. Penney and Kohl's also topped
estimates, helping to prompt their boosted forecasts. Penney's
shares fell 1.6%, while the others were little changed.
The segment with the smallest outperformance was discounters,
which had been among the best performers in the retail industry.
The shift has been partially due to the effects of slumping
gasoline prices and currency changes on BJ's Wholesale Club Inc.
(BJ) and larger rival Costco Wholesale Corp. (COST). BJ's on
Thursday posted a 5.5% gain excluding gasoline sales, another month
of outpacing peers but below analysts' expectations. That helped
push the stock down 3.7% in early trading. Costco on Wednesday
reported a 3% rise on that basis in the U.S., double estimates.
Off-price apparel sellers TJX Cos. (TJX) and Ross Stores Inc.
(ROST) have been posting some of the best results of late, and they
had growth of 7% and 8%, respectively, again topping expectations.
Shares of both gained.
Also, Gap Inc. (GPS) posted a roughly in-line 1% drop. Its
long-struggling Old Navy chain reported surprise growth in August
and posted a stronger-than-expected 13% jump for September - the
biggest gain in 5 1/2 years. The company added that merchandise
margins for the month were significantly" above year-earlier
levels.
-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354;
kevin.kingsbury@dowjones.com
(Karen Talley contributed to this story.)