April Retail Sales Seen Benefiting from Easy Comparisons

The Thomson Reuters Same Store Sales Index is expected to show 1.4% growth for April 2016. It’s not much of a gain, but quite a bit stronger than April 2015’s -2.3% result. This year, the retail sales figures are benefiting from comparisons to those sluggish numbers a year ago.

Gap has the heaviest weighting in our apparel sector, and is bringing the overall group down with a 0.5% SSS estimate. Analysts polled by Thomson Reuters expect the apparel sector as a whole to report a 1.8% SSS gain, compared to the -7.7% SSS recorded in April 2015. Excluding Gap, apparel is set to improve at 3.6%, above the -2.2% result posted in April 2015. L Brands has the strongest estimate in this group at 4.8%. On the flip side, teen retailers The Buckle and Zumiez have the weakest SSS estimates in the group at -6.9% and -4.3%, respectively.

April marks the last month of the retail industry’s first quarter and we have received a significant amount of negative guidance for that period. Consequently, analysts have been lowering first quarter comp estimates. Our Thomson Reuters Quarterly Same Store Sales Index, which consists of 80 retailers, is expected to post 1.4% growth for Q1 (vs. 1.6% in Q1 2015).

Exhibit 1.  April 2016 SSS estimates

Source: I/B/E/S estimates  Note: Aggregate mean data is revenue weighted.

Exhibit 2.  L Brands on Top; The Buckle Expected to Post the Weakest SSS

Source: I/B/E/S estimates