ANN -43.8 x 44.16 pm - once again beat estimates.
More evidence the retailing lull is spreading, and ANN is priced for high growth. Their time is near and every tick up makes for a better profit on the way down with puts.
Retail Sales Growth Stalls in June
Thursday July 6, 9:02 am ET
By Anne D'Innocenzio, AP Business Writer
Retail Sales Growth Stalls in June, Leaving Merchants Wondering Whether Shoppers Are Curbing Their Spending
NEW YORK (AP) -- Retail sales growth stalled in June, leaving merchants wondering whether shoppers who were resilient for much of the year are now curbing their spending because of higher gas prices.
As the nation's retailers began reported their monthly sales Thursday, disappointments included Wal-Mart Stores Inc., Costco Wholesale Corp. and Limited Brands Inc. There were also the usual laggards -- Gap Inc. and Pier 1 Imports Inc., which again suffered sales drops. Winners included J.C. Penney Co. Inc. and AnnTaylor Corp.
"It's a mixed bag, but it is definitely slower," said Jharonne Martis, an analyst at Thomson Financial. "Consumers' discretionary spending is decreasing as the economy is slowing down."
According to Thomson Financial's tally of same-store sales, which measure sales at stores open at least a year, 20 retailers beat estimates,while another 22 missed. Results at two merchants met expectations. Same-store sales are considered a key measure of a retailer's health.
June -- the second most important month of the year in a retailer's calendar behind December-- is the period when merchants start to clear out summer goods to make room for fall merchandise.
Stores had some big challenges last month. Rainy weather, particularly in the Northeast, made selling summer clothes difficult. Results were also hurt by comparisons with June 2005, when the same-store sales tally was the strongest in a year, helped by warm weather.
But analysts believe consumers are starting to feel the effects of increasing economic pressures including higher gasoline prices and interest rates. Higher rates have also helped cool the housing market. Last week, the Federal Reserve raised short-term rates to the highest point in more than five years but also lifted hopes that a respite from two years of increases might be in the offing.
Stores have feared a slowdown in consumer spending in the second half, but the question is how deep and when will it start.
Economists are closely watching the job market, a key factor in spending and which has remained healthy despite a spring slowdown. The Labor Department reported Thursday that the number of Americans filing new claims for unemployment benefits declined slightly last week.
The Labor Department said applications for jobless benefits totaled 313,000 last week, a drop of 2,000 from the previous week.
Wal-Mart, whose low-income customer is most vulnerable to higher energy costs, has said it started feeling the pain from the pump earlier this spring. In June, the world's largest retailer reported a same-store sales increase of 1.2 percent, below the estimates of analysts surveyed by Thomson Financial; they predicted a gain of 2 percent.
Tom Schoewe, executive vice president and chief financial officer of Wal-Mart, noted in a news release Thursday that Wal-Mart continues to see customers making fewer trips to the store because of higher gas prices.
"The priority in spending by our customers is on food and consumables," said Schoewe, who also noted that cooler weather in some regions of the country helped to soften sales of seasonal merchandise.
Costco reported same-store sales increase of 6 percent. Analysts expected a 6.9 percent gain.
Results at department stores, which had shown a rebound earlier this spring, were mixed. Nordstrom had a 4.7 percent gain in same-stores sales, slightly below the 4.9 percent estimate.
Federated Department Stores Inc., which acquired May Department Stores Co. last year, had a 1.7 percent increase in same-store sales. That was below the 2.8 percent estimate from Wall Street. Same-store sales include only Macy's and Bloomingdale's.
But J.C. Penney Co. Inc. had a 4.3 percent gain in same-store sales in its department store business, better than the 2.8 percent increase Wall Street expected.
Limited reported a 3 percent increase in same-store sales, below the 5.1 percent analyst estimate.
AnnTaylor continued its sales momentum, posting a 12.5 percent increase in same-store sales for the month. That surpassed the 6.1 percent estimate.
At Children's Place, same-stores sales rose 14 percent, better than the 10.8 percent projected by Wall Street.
Gap posted a 6 percent drop in same-store sales, worse than the 5.1 percent estimate.
Home furnishings retailer Pier 1 posted a 18.4 percent drop on weaker customer traffic, missing expectations for a smaller decline of 14.1 percent
Teen retailers, whose results had rebounded in recent months, had generally disappointing results.
Abercrombie & Fitch Co. suffered a 4 percent decline in same-stores sales, worse than the 0.3 percent gain analysts had projected. Pacific Sunwear of California Inc. suffered a 2.7 percent drop in same-store sales, worse than the 0.5 percent decline expected.
But Bebe Stores Inc. posted a 3.5 percent gain for June, matching Wall Street estimates. |
