by Jharonne Martis.
The back to school season hasn’t generated much excitement at the retail counters. The Thomson Reuters Same Store Sales Index is expected to register a -0.3% result for September 2016, a decline from September 2015’s 0.8% result. The discount sector is the only group expected to see a positive growth in September, while teen retailers are hurting the worst.
Gap has the heaviest weighting in our apparel sector, and is bringing the overall group down with a -2.9% SSS estimate. Still, its Old Navy division is receiving some boost from back to school sales and is expected to register a 1.3% SSS.
Analysts polled by Thomson Reuters expect the apparel sector as a whole to report a -2.0% SSS, compared to the 2.6% SSS recorded in September 2015. Meanwhile, L Brands has the strongest estimate in this group at 0.1%, well below last year’s 9.0% SSS. Victoria Secret’s -1.8% SSS estimate brings the sector down as it continues to struggle transitioning its merchandise. Similarly, teen retailers The Buckle and Zumiez have the weakest September SSS estimates, at -11.0%, and -1.0%, respectively.
September marks the second month of the retail industry’s third quarter. Our Thomson Reuters Quarterly Same Store Sales Index, which consists of 80 retailers, is expected to post 1.1% growth for 3Q (vs. 1.4% in 3Q 2015).
Exhibit 1. September 2016 SSS estimates
Source: I/B/E/S estimates. Note: Aggregate mean data is revenue weighted.
Exhibit 2. Costco is on Top, While The Buckle Is Expected to Post the Weakest SSS
Source: I/B/E/S estimates