September Saw Positive U.S. Retail Surprises

Final September retail numbers are indicating that the back to school fall season showed some life in certain sectors.

The Thomson Reuters Same Store Sales Index registered a 0.3% increase for September, beating its -0.3% final SSS estimate.

The positive surprises were led by apparel sellers Zumiez and L Brands. After 17 months of negative SSS, Zumiez came in on top with a 6.3% SSS results, above its -1.0% final estimate. As a result, the retailer raised its third quarter earnings guidance. L Brands also came in stronger than expected with a 3.0% SSS result. It received a boost from its Bath and Body Works division’s 9.0% gain, while its Victoria Secret’s group posted a flat comp.

Among discounters, Costco posted a better-than-expected 1.0% SSS.

Turning to the negative, teen retailer The Buckle registered the weakest result in our retail universe at -15.5%, followed by Cato Corp.’s -9.0% SSS result. Gap registered a weaker than expected -3.0% SSS, saying that sales were negatively hurt by a fire which occurred in its New York distribution center. Still, its Old Navy division registered a robust 4.0% comp, above its 1.3% SSS final estimate.

September marks the second month of Q3 2016. The Thomson Reuters Quarterly Same Store Sales Index, which consists of 80 retailers, is expected to post 1.1% growth for Q3 (vs. 1.4% in 3Q 2015).

Exhibit 1.  Performance — Overall and Compared to Expectations

Source: I/B/E/S estimates

Exhibit 2.  Beat — Met — Missed

Source: I/B/E/S estimates