With strong August retail sales numbers in general, along with news retailers such as Nordstrom Inc. (NYSE: JWN) and Kohl’s (NYSE: KSS) that exceeded estimates, clothing shops and mall mainstays are back on track after a summer of mostly bad economic news.
Thanks in large part to tax-free holidays and back-to-school discounts, sales rose in all categories for discounters, department stores and apparel chains tracked by Thomson Reuters. Two-thirds of retailers either beat or met expectations.
The largest gain for the department store chains came from Nordstrom, which saw sales at stores open at least a year increase by +6.3%. (Its full-line division posted a +7.8% increase in August same-store sales, while the direct division, which includes online sales, had a +3.7% gain.) Kohl’s recorded the second-highest increase, up +4.5%, while Macy’s (NYSE: M) was a +4.3% increase in August.
Sales at Limited Brands Inc. (NYSE: LTD), owner of the Victoria’s Secret chain among other stores, rose +10%, more than the +7% average of analysts’ estimates, which are compiled by Retail Metrics Inc. Kohl’s beat analyst estimates by about +1%. All this is great news for previous investors and those looking at the growth opportunity in the market.
Home-furnishings retailer Pier 1 Imports, Inc. (NYSE: PIR) leapt +16.97% to $7.65 on more 8.56 million shares, after the home furnishings retailer reported its comparable-store sales increased +11.2% in the last quarter. Sales in the Aug. 28-ended second quarter rose to $310 million from $287 million in the same quarter last year. Nordstrom surged 8.05% to $32.76 on over 6.93 million shares. The volumes on most were moving higher.
It’s a stunning improvement from August 2009, when same-store sales fell -7.6 % from the same month in 2008. And with back-to-school shopping still chugging along in some areas of the country, those big posts are likely to continue. In the last week alone, the numbers have surged.
In the last week of trading alone compared to the Dow’s +2.4% increase, JWN saw a +11.96% gain; Amazon.com (NASDAQ: AMZN) is up +9.1%; LTD is up 2.5%, JC Penney (NYSE: JCP) is up +7%; and Macy’s increased +7.32%. On Thursday, Macy’s announced its same-store sales rose 4.3% last month. Indicators for the stock are bullish and S&P gives M a positive 4 out of 5-star “buy” ranking
Even many poor-performing retail stocks – despite their recent unpopularity with investors – saw explosive growth in the last week. American Apparel (AMEX: APP), for instance, down -66% year-to-date against the Dow, spiked. APP stock is up +27% in the last week.
Same-store sales at 30 chains have reportedly risen +3.5% from last month, when numbers are finalized today. (Same-store sales are a key indicator of a retailer’s growth.) Analysts at Retail Metrics, a Massachusetts-based research firm, expected a gain of +2.8%. They rose +3% in July.
The boost in sales was helped in that Illinois, Florida, Maryland and Massachusetts were four states that added tax-free holidays this year, on top of others that already occur nationwide.
While analysts don’t expect the good news to become a habit for retailers, with today’s strong stock numbers, the week could end on a very high note and momentum may carry over into next week.
As of this writing, Burke Speaker did not own a position in any of the stocks named here.
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