June rains, penny-pinching dampen retail sales
NEW YORK (Reuters) - June sales fell for most U.S. retailers as the plunging job market and cool, rainy weather dampened interest in summer shopping for consumers, triggering concern about the back-to-school season.
But some retailers stuck to their forecasts, or even raised their outlooks after spending months trimming inventories and cutting costs.
This helped support some stocks. The Standard & Poor's Retailing Index was up 0.3 percent on Thursday morning, roughly in line with the broader S&P 500.
Sales at stores open at least one year fell 4.9 percent overall, Thomson Reuters data showed. More than half of the retailers polled missed expectations, with teen apparel chains and department stores posting the steepest declines.
Among clothiers, Gap Inc, Limited Brands Inc, American Eagle Outfitters Inc and Abercrombie & Fitch all reported double-digit drops.
Department stores followed suit. Macy's Inc reported a same-store sales decline of 8.9 percent, while higher-end chain Nordstrom Inc posted a 10 percent drop.
"We continue to have an exceptionally stressed consumer," said Craig Johnson, president of retail research firm Customer Growth Partners. "Almost across the board, there's evidence the green shoots are few if any among a very brown field."
The long recession, growing job losses and tight access to credit have forced shoppers to seek deep discounts and buy only essential items like groceries and toiletries.
Discounter Target Corp posted a 6.2 percent drop in same-store sales, compared with the 5.6 percent decline analysts expected. Demand was strong for food and health care items, but remained weak for clothes and home goods, the company said.
But Target also said quarterly earnings would meet or exceed Wall Street expectations, and its shares rose more than 4 percent.
Costco Wholesale Corp posted a 6 percent drop in June same-store sales, in line with Wall Street estimates. It cited tepid demand for such items as cameras and air conditioners and more interest in foods.
Rival BJ's Wholesale Club Inc reported a 7.5 percent decline in same-store sales, slightly lower than expected.
Monthly retail sales reports have been barometer of the overall economy. But Wal-Mart Stores Inc's decision in May to stop disclosing this data has made it tougher to judge the industry's overall performance each month, analysts have said.
WET JUNE
June usually marks the onset of summer weather, when consumers seek out items like light clothing, beachwear and barbecue equipment. Continued...
