June was a dissapointing month across the board for retailers, with all but a handful of companies posting disappointing same-store sales results. While consumers seemd to be showing signs of life in April, the optimism for the most part has disappeared and the best that can be said about June’s results are at least things aren’t getting worse. While unseasonally wet and cold weather certainly played a factor, it’s becoming more and more likely the summer season will be a washout, and the next best hope for retailers is back-to-school and fall fashion lines. Below we highlight the 2 worst-performing sectors in June – teen and luxury retail:
Teen Retailers:
Total net sales for the month declined 7.0% to $853.6 Million, while same-store sales decreased 10.7% from the year-ago period. Aeropostale and The Buckle continue to be the only shops in the sector escaping the carnage – Aeropostale once again beat analyst estimates, and has posted same-store sales gains in 22 of the last 23 months; Buckle has now posted 34 consecutive months of positive same-store sales results. However, the 9.6% same-store gain this month trailed consensus estimates of 12%, and June broke a streak of 22 months of double-digit gains. Hot Topic, which had posted 7 consecutive months of positive results, has now posted 2 straight declines. Overall, the sector continues to be extremely weak, with the intense competition leading to aggressive promotions to try and lure shoppers. The back-to-school season is now the focus, and the hope is that with Labor Day falling a week later than last year, retailers will be able to post marginal improvements in September’s results.
| Company | Net Sales | Net Sales Chg | Same-Store Sales Chg |
|---|---|---|---|
| Abercrombie & Fitch | $230.4 Million | -26.0% | -32.0% |
| Aeropostale | $163.2 Million | 20.0% | 12.0% |
| American Eagle Outfitters | $246.1 Million | -4.0% | -11.0% |
| Buckle | $70.8 Million | 14.4% | 9.6% |
| Hot Topic | $59.5 Million | -5.8% | -7.9% |
| Wet Seal | $51.6 Million | -9.3% | -11.1% |
| Zumiez | $32.0 Million | -7.9% | -19.3% |
Luxury Retailers:
Total net sales were $1.239 Billion, a decline of 9.6% from June 2008, while sales were down 11.8% on a comparable same-store basis from the year ago period. This is the 13th consecutive month of declines and the 10th straight double-digit drop for the sector. While on the face of it the results were not all that bad, with Nordstom coming in ahead of estimates and Saks posting results well ahead of an expected decline of 11.8%, it’s clear the main driver for the better than expected results were deep markdowns and seasonal promotions. Most of the gains at Saks came from a one-time designer sale which shifted into June from May last year, and Nordstrom noted that its 17-day anniversary sale begins in the middle of July. With all of the sales and promotions at department stores, and the especially deep discounts at luxury retailers, it will be extremely tough to convince shoppers to pay full price when consumers are once again willing to spend.
| Company | Net Sales | Net Sales Chg | Same-Store Sales Chg |
|---|---|---|---|
| Neiman Marcus | $323 Million | -19.4% | -20.8% |
| Nordstrom | $686 Million | -6.2% | -10.0% |
| Saks | $230.2 Million | -3.8% | -4.4% |
