NEW YORK (Reuters) - Teen apparel retailers led generally stronger-than-expected U.S. same-store sales in September, helped by a late start to the back-to-school season as shoppers held out for bargains.
Retail experts warned that shoppers will remain cautious as they draw up budgets for the holiday season as unemployment stays high, even though overall spending is expected to rise from 2009.
“It was a late back-to-school season that started slowly while shoppers waited for discounts,” said David Bassuk, managing director at AlixPartners’ global retail practice. “And it looks like they’ll do the same for the holidays.”
U.S. same-store sales rose 2.8 percent, according to Thomson Reuters data which tracks 28 top chains, beating analysts’ estimates for a 2.1 percent increase. It was the 13th straight month of sales gains.
Nearly 75 percent of retailers who reported beat Wall Street forecasts.
“My impression is we are likely to see a decent sequential improvement from last year’s holiday (season) based on what is a decent sequential improvement in back-to-school,” said Sarah Henry, equity analyst at MFC Global Investment Management.
Apparel chains appealing to young shoppers such as Abercrombie & Fitch, and The Buckle and Zumiez were by far the best performers as their customers stocked up on clothes and accessories for school. Shares in those companies saw some of the sharpest gains on Thursday.
Abercrombie shares were up 10 percent, American Eagle gained 7.5 percent, Buckle rose 10.4 percent and Zumiez jumped 7.3 percent. American Eagle was one of two retailers, along with Ross Stores Inc, to raise its profit forecast. The wider Standard & Poor’s Retail Index was flat.
Department stores and luxury chains also posted forecast-beating results, with J.C. Penney Co Inc, and Macy’s Inc helped by exclusive merchandise lines.
But Penney said it was sticking to its current earnings forecast because of a highly promotional environment and consumers’ inconsistent shopping habits.
Luxury retailer Neiman Marcus Group posted results that reflect high-end spending’s gradual recovery, with a jump of 4.7 percent. Nordstrom Inc and Saks Inc results were above Wall Street forecasts.
There were some pockets of weakness and signs that the momentum waned as September wore on. Year-over-year comparative sales gains will become tougher as of October, as retail sales rebounded from the recession in earnest a year ago.
The International Council of Shopping Centers forecast October same-store sales to rise 2.5 percent to 3 percent.
Retailers Gap Inc and discounter Target Corp missed the mark. Target said that sales softened as the month progressed and reported disappointing apparel sales.
“It was a back-to-school buying bubble,” said KeyBanc Capital Markets analyst Ed Yruma.
Last week, the Thomson Reuters/University of Michigan Surveys of Consumers showed consumer sentiment remained at its weakest level in more than a year due to economic worries among upper-income families.
“I hit the sale rack first,” said Fayola Romano, a medical receptionist from Brooklyn who was shopping on Wednesday at a Macy’s store in Manhattan.
“I think I’m going to wait until the season gets closer, and then figure out if I am going to shop as much,” she said of her holiday spending plans.
Reporting by Phil Wahba; additional reporting by Brad Dorfman in Chicago, Helen Chernikoff and Jon Lentz in New York, and Nivedita Bhattacharjee in Bangalore. Editing by Michele Gershberg, Dave Zimmerman