May Retail Sales Fall More As Most Stores Miss Projections
June 04 2009 - 10:10AM
Dow Jones News
Final numbers are in for retailers and they show a much
bigger-than-expected drop in May same-store sales, as the absence
of rebate checks and a continued reining in of consumer spending
combined to crimp buying.
Comparable-store sales fell 4.8% for the 30 retailers that
Thomson Reuters tracks, when a 4.1% decline was expected.
The results show many more retailers fell short of projections
than in April. Some 63% of retailers missed projections for May and
just 33% beat estimates. In April it was nearly the reverse, with
36% missing projections and 64% beating. Same-store sales dropped
2.7% in April, a month that included Easter.
May was the first month in decades that Wal-Mart didn't add
ballast to the group.
May's results were marred by the lack of economic stimulus
checks that customers spent during the same period last year.
Also, analysts may have been more optimistic because some better
economic data had been coming in, and April's results had showed a
big improvement from March's 5% decline.
Another factor may have been "not as much discounting as
customers have come to expect," said Jharonne Martis, retail
analyst at Thomson Reuters.
The price of gasoline also rose during the month.
The disappointing figures cut across all industries.
Among wholesale clubs and mass merchandisers, Costco Inc. (COST)
and Target Corp. (TGT) missed. Among department stores, Dillard's
Inc. (DDS) posted a drop of 12% when an 8% decline was
projected.
In the teen retail group perennial struggler Abercrombie &
Fitch Inc. (ANF) had the worst reported comps and among the biggest
misses, with sales falling by 28%.
On a bright note, there was consistency among retailer that have
been doing well.
Aeropostale Inc. (ARO) posted a 19% rise in
comparable-store-sales when 10.7% growth was projected. Buckle
(BKE) has now posted positive comparable store sales for 33 months
in a row, with a rise of 13.4% when 11.2% was projected.
Investors displayed their disappointment, sending many
retailers' shares lower. The S&P Retail Index is off 1.8%. The
biggest decliners include Abercrombie & Fitch, down 8.7% to
$28.93; Children's Place Retail Stores Inc. (PLCE) off 7.7% to
$31.84; and Hot Topic Inc. (HOTT) losing 6.4% to $7.07.
By Karen Talley, Dow Jones Newswires, 201-938-5106;
karen.talley@dowjones.com