PREVIEW-UPDATE 2-Late holiday pressures US Aug. retailer sales

Tue Sep 1, 2009 2:32pm EDT

 * What: Many U.S. retailers report August sales
 * When: Wednesday Sept. 2-Thursday, Sept. 3
 * Same-store sales seen down 3.8 pct, on average
 * "Tax holiday" shift helps; late Labor Day holiday hurts
 (Updates Thomson Reuters forecast)
 By Brad Dorfman
 CHICAGO, Sept 1 (Reuters) - U.S. retailers are likely to
get an "incomplete" mark for the key back-to-school season when
they report August sales this week, as a later Labor Day
holiday is expected to pull some sales into September,
pressuring August results.
 Retailers that report August sales -- a group that does not
include industry giant Wal-Mart Stores Inc (WMT.N) -- are
expected, on average, to post a decline of 3.8 percent in sales
at stores open at least a year, according to Thomson Reuters
 Investors are looking for signs that consumers, who account
for about 70 percent of U.S. economic activity, are loosening
their purse strings after pulling back during the worst
recession since the Great Depression.
 "It's going to be watched very closely," Ken Perkins,
president of Retail Metrics Inc, said of August sales data.
"Did anyone go out and start picking up their discretionary
spending here?"
 Retail stocks have rallied sharply since early March,
helped by cost cuts that helped offset falling sales. The
Standard & Poor's Retail index .RLX is up more than 56
percent since early March, though some analysts say retailers
will need to start showing sales improvement for the stocks to
rally much further.
 The sales view is likely to be distorted by the shift of
Labor Day -- which falls on the first Monday in September -- to
Sept. 7 in 2009 from Sept. 1 in 2008. That shift means seven
more pre-Labor Day selling days, including the entire holiday
weekend, will be in the September sales reporting month this
year. Last year, the Saturday of Labor Day weekend fell in
 "A lot of people traditionally wait for that Labor Day
weekend to do their back-to-school shopping," Perkins said,
estimating that a couple of percentage points of sales growth
could be lost this August.
 But some of the impact from the later Labor Day will be
muted by a shift of some states' sales tax "holidays" into
August from July, analysts said.
 Overall, a better look at the back-to-school season --
often seen as a harbinger of the Christmas holiday selling
season -- will be seen by combining August and September sales
this year.
 "There are some tricks of the calendar this year, with
variations in tax holidays and a delayed back-to-school season,
so there may be volatility in August sales and September"
sales, Lawrence Creatura, a portfolio manager at Federated
Investors, said.
 On Tuesday, the International Council of Shopping Centers
and Goldman Sachs said sales for the week ended Aug. 29 were
down 0.5 percent from the previous week and down 0.7 percent
from a year earlier.
 ICSC forecast a decline of 3.5 percent to 4.0 percent for
the month of August.
 Still, there are some signs of brighter consumer sentiment
and economic improvement, which could help sales going forward.
The U.S. economy shrank less than expected in the second
quarter, and fewer workers filed new claims for jobless
benefits last week, among the latest signs that the economy
could be shrugging off the recession. [nN27303398]
 "If there is an uptick, then the holiday season could have
a chance at a modest season, not just an absolutely terrible
one like (retailers) had last year," Perkins said.
 Most retailers have seen sales hammered by the recession,
though discounters and other stores seen as offering value for
cash-strapped consumers, such as TJX Cos Inc (TJX.N), have
 "I can't tell you how many people I talk to who say they
are doing their back-to-school shopping at Ross or T.J. Maxx,"
Patricia Edwards, founder and chief investment officer at
Storehouse Partners, said. "It's becoming chic to save money."
 Ross Stores Inc (ROST.O) and TJX are expected to post
higher same-store sales in August, while apparel retailers
overall are expected to show a 3.3 percent decline, according
to Thomson Reuters data. Discount retailers are expected to
show a 5.5 percent decline, while department stores are seen
down 6.9 percent.
 Same-store sales at teen and child apparel retailers, which
are particularly affected by back-to-school sales, are expected
to be down 9.5 percent.
 (Reporting by Brad Dorfman; Editing by Richard Chang, John
Wallace and Matthew Lewis)

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