While drug stores remain a drag on the index and the performance was less robust than in August, September’s same store sales came in squarely in line with what analysts had been anticipating, with apparel retailers once again leading the way.
Same store sales in September came in on target, with the Same Store Sales Index posting a gain of 3.6%, excluding data from the drug stores, as analysts had forecast. That is a more anemic performance than retailers were able to display in September 2011, when the same group reported a 6.4% gain in same-store sales, and once drug stores are added to the equation, the performance looks more underwhelming still. Including drug stores, SSS advanced only 0.8% in September 2012, compared to a 5.5% gain in the year-earlier period and below the forecast level of 1.6%.
As expected, a number of retailers benefitted from the back-to-school shopping season, including Sage Stores (SSI.N), Gap (GPS.N), TJX Companies (TJX.N) and Zumiez (ZUMZ.O). Gap’s Old Navy division traditionally performs best from amongst its store lineup during the back to school period, and September 2012 was no exception. Overall, Gap was the strongest performer among the generally strong apparel sector, posting a 6% advance in same-store sales for September. TJX matched that, with a 6% gain, while Ross Stores (ROST.O) announced a 5% jump in SSS. One of the biggest positive surprises from within the apparel group came from Limited Brands (LTD.N), which announced a 5% gain in SSS, compared to a forecast of a 4.3% advance, with a robust performance by Victoria’s Secret offsetting a decline in SSS from its La Senza brand.
The Teen Apparel fared better than analysts had feared; same-store sales for the group declined 3.8%, but that is a smaller decrease than the 4.7% decline analysts had forecast. Wet Seal, one of the heaviest-weighted components in the sector, was the biggest drag on the group, announcing a 12.7% drop in same-store sales. Zumiez surprised on the upside with a 5.6% gain in SSS.
So far this year, retailers have posted a healthy 4.6% gain in same-store sales for 2012 over 2011, on average. That compares to the average gain of 5.4% in 2011 in the same period, but it’s still a healthy advance.
Analysts suggest that Stage Stores will follow its success in beating its September SSS estimate by beating third-quarter earnings estimates. On the other hand, Stein Mart, which reported September sales that fell short of expectations, is now expected to report earnings that fall short of analysts’ forecasts.
• For the full report, please click here.
• For more on analysts’ changing views of retail Sales, please watch this interview with analyst Jharonne Martis.
