Gap records first comps success in over a year in a quiet June for US retail
While June wasn’t exactly busting out all over in terms of US retail sales – a usually quiet month before the Back-to-School season begins – Gap Inc as least finally came good last month.
The retail giant (pictured) posted a surprise 2% comp sales rise, albeit buoyed by strength at its Old Navy brand, ending more than a year of monthly declines.
Analysts had expected a 3% comps dip and its shares rose 4% in after-hours trading.
“We are pleased to see better performance across the portfolio this month, partly driven by an improvement in June traffic trends,” it said.
There was still a comps dip at its core signature brand to report, down a modest 1% compared to a 5% fall a year ago, with Banana Republic down 4%, both offset by a 5% rise for Old Navy.
Total sales also rose 2% to $1.57bn.
Good news from L Brands regarding its June performance was stifled by a not-so-good outlook for this month.
The Victoria’s Secret parent said same-store sales climbed more than expected 6% last month, neatly ahead of the low single digits rise forecast. Analysts had also penciled in a 2.1% rise. Total sales increased 7% to $1.3bn for the five weeks ended July 2.
However, it also warned that sales could flatten or fall in July and its share price closed down over 1.5%.
For June, same-store sales at Victoria’s Secret increased 6%, and rose 7% at Bath & Body Works. The company said it was helped by timing shifts in the Memorial Day and Independence Day holidays this year.
Strength in the Pink business at Victoria’s Secret due to semi-annual sales was partially offset by softness in non-core areas such as swimwear and apparel.
However, margins were down significantly due to clearance items at Victoria’s Secret.
Elsewhere, Cato Corp said total June sales fell 6% to $88m and comps dipped 8%. Analysts had been expecting a 1% comps rise.
“June same-store sales were well below expectations,” said CEO John Cato.
Zumiez’ June net sales fell 0.6% to $66.6m and comps dipped 4.5% last month, which, worse than last year’s 3.3% dip. Analysts had expected a 6% fall.
CFO Christopher Work said that while the number of transactions fell, the dollar amount per transaction increased. Men’s posted positive comps, while the other categories fell.
The Buckle’s net sales plummeted 10.1% last month to $78.3m and comps dipped 10.6%., topping analysts’ call for a 9.5% decline.
Fred’s total sales for June fell 2.3% to $208.5m and comps fell 1.3% versus an increase of 1.6% a year ago.
CEO Jerry Shore said: “Although sales for the month were lower than planned, we were encouraged with the front store performance in June. Sales growth in core categories such as health and beauty aids, seasonal, apparel, toys, lawn and garden and electronics helped offset ongoing challenges in paper, chemicals and food that we have discussed on earlier occasions.
“Looking ahead, we remain confident in the direction of our business and the success of our initiatives to drive future growth and profitability.”
Costco Wholesale Corp said its June comps were flat, hurt by cheaper gasoline prices and currency headwinds.
However, core sales rose 3%., above analysts’ expected growth of 1.75%.
In the US, comp sales were flat but rose 2% excluding gas prices and currency fluctuations, above the analyst estimate for growth of 1.25%.
Total sales in June rose 3% to $11.33bn, helped by strength in Canada where sales increased 1% overall and by 7% excluding gas prices and currency.