Retailers fare well in August, sales beat estimates
(Reuters) - Nearly all U.S. retailers posted better-than-expected sales gains in August at stores open at least a year as parents and students wrapped up back-to-school purchases, setting the stage for a strong third quarter.
August same-store sales rose 3.6 percent at retailers tracked by Thomson Reuters I/B/E/S, trumping forecasts for a 2 percent rise. The results exclude teen retailer Zumiez Inc (ZUMZ.O), which reports numbers later Thursday.
"It's a much stronger back-to-school season than even the most optimistic analyst could have forecast," said Joel Bines, managing director of AlixPartners' retail practice.
The sales trend will give retailers confidence about the consumer mindset going into the holidays, Bines said.
"They will be cautious and have planned promotions but can have more confidence about not needing unplanned promotions," he said.
Back-to-school is the second-biggest selling season for retailers in the United States, after the winter holidays.
Retailers face a somewhat difficult climate. Earlier this week the U.S. Commerce Department said consumer spending in the second quarter was revised up a notch but was still below the first quarter's pace. Consumer spending accounts for about 70 percent of U.S. economic activity.
SALES TRUMP EXPECTATIONS
Retail shares were modestly higher Thursday morning, with Buckle Inc (BKE.N) and Gap Inc (GPS.N) among the biggest gainers.
Gap's 9 percent rise in same-store sales topped analysts' forecast for a 5.4 percent increase. The results were driven by strong back-to-school sales, particularly at its Old Navy chain, where North American same-store sales jumped 12 percent.
Same-store sales are an important measure of retailer performance because they strip out the effects of store openings and closings.
Teen retailer Wet Seal Inc WTSLA.O was the only company to miss sales estimates.
A strong August at TJX Cos Inc (TJX.N) has the off-price retailer now expecting third-quarter earnings per share near the high end of its estimated range of 56 cents to 59 cents.
Nordstrom Inc (JWN.N) got a big boost from the timing of its Anniversary Sale. Eight days of the sale, which offered discounts on fall merchandise, fell in August this year versus just one day in August of 2011. Same-store sales rose 21 percent, blowing past analysts' expectations for an 11.1 percent rise.
At Target Corp (TGT.N), sales were stronger in the second half of the month as shoppers responded to "compelling value for their back-to-school and back-to-college shopping," said Chairman and Chief Executive Gregg Steinhafel. Same-store sales were strongest in food, followed by health and beauty products.
Limited Brands Inc LTD.N, which owns the Victoria's Secret, Pink and Bath & Body Works chains, saw same-store sales rise 8 percent, well above analysts' average view of 4.2 percent.
(Reporting by Nivedita Bhattacharjee and Jessica Wohl in Chicago, Phil Wahba and Dhanya Skariachan in New York; Editing by Jeffrey Benkoe and John Wallace)
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