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Tuesday News & Notes: It All Comes Down to This

Published December 20, 2011 Uncategorized Leave a Comment
Tags: chain store sales, icsc, retail news, retail trends

Following a pronounced two-week long post-Thanksgiving hangover, chain store sales rebounded strongly in the latest week. However, the next six days will ultimately make or break the season for many retailers as the week leading up to Christmas typically accounts for roughly a third of all holiday business.

The ICSC reported that chain store sales rose by the most in nearly 11 years, increasing 3.4% from the prior week, and rose 4.6% over the prior-year period during the week ending Dec 17th, the most since the week ending July 9th. The outsized increase was likely a catch up following the pronounced two‐week lull in early December when sales rose only a modestly‐positive 0.3%.

The ICSC‐Goldman Sachs’ consumer tracking surveys found that the average gift completion rate was 70% through Sunday, compared to 74% in the same week in 2010. And a new survey from Visa revealed 77% of consumers still need to buy holiday gifts this week, with last-minute shoppers set to spend an average of $278 in the final days leading up to Christmas and Hanukkah.

One area that continues to concern us is sales and inventory overhang of cold weather apparel. Weather Trends International said national temperatures over the past week ending Saturday were a whopping 7.8°F warmer than last year and 3.7°F warmer than its long-term average. There has been no respite from the unseasonably warm weather and many chains have been forced to take unusually steep and early markdowns.

For example, Modell’s Sporting Goods: “We bought almost triple the inventory because last year we had sold out on a lot of key items by early December,” CEO Mitchell Modell told The NY Post.
“In our 122-year history, we have never taken prices this deep this early,” Modell added, noting that prices on Columbia Sportswear jackets already were slashed by as much as 50%. Continue reading ‘Tuesday News & Notes: It All Comes Down to This’

Tuesday News & Notes

Published March 8, 2011 Uncategorized Leave a Comment
Tags: icsc, johnson redbook, mcdonald's (mcd), retail news, retail sales, same-store sales

McDonald’s reported its 94th consecutive month of same-store sales growth in February, as the quick-service giant continues to outclass its rivals. Total global system-wide sales grew 8.1% for the month, up 5.2% excluding foreign exchange, while same-store sales rose 3.9%. By region, comparable sales rose 2.7% in the US, 5.1% in Europe and 4.0% in APMEA (Asia Pacific, Middle East, & Africa).
Weekly retail sales continue to hold steady, with ICSC reporting a 2.6% rise and Redbook Research a 2.0% gain compared to the same week last year for the first week of February. However, March same-store sales are expected to be weak as Easter falls three weeks later this year, which will push sales into March from April. ICSC projects chain store sales will be flat to up 2% for the month.
Urban Outfitters reported a quarterly profit yesterday which missed analyst expectations, and the stock is getting hammered by 15% today as a result. However, for the full fiscal year 2010, the company grew total sales by 17.4% and earnings per share by 25%. Compounded annually over the past 10 years, they have grown net income 38.5% & earnings per share 34.9%.
Dick’s Sporting Goods beat analyst estimates as 4th quarter sales increased 13.6%, same-store sales rose 9.4% and net income jumped 30%. For the full fiscal year, total sales increased 10.4% to$4.87 billion and same-store sales rose 7.4%, while net income increased 35% to $182 million ($1.50 Diluted EPS).
The flurry of earnings and economic reports continues this week, as Stage Stores and Hot Topic also reported this morning, with J Crew due out with earnings after the close today. Tomorrow, American Eagle Outfitters, Bon-Ton, Children’s Place, Coldwater Creek, Gymboree and Men’s Warehouse are all scheduled to report earnings. Thursday will bring releases from Aeropostale, Pacific Sunwear and Zumiez, as well as the Bloomberg Consumer Comfort Index. Finally, on Friday the Census Bureau will release February US retail sales and we will get a preliminary reading for March on the Reuters/University of Michigan Consumer Sentiment Index, as well as earnings reports from Ann Taylor, Buckle, Citi Trends and Hibbett Sports.

Here are some other good reads for today:

St. Patrick’s Day Expected To Give U.S. Retailers A Spring Boost As Spending Will Top $4 Billion (NRF)
Apple to cut products from retail stores and expand personalized setup (AppleInsider)
The Subway sandwich chain has surpassed McDonald’s as the world’s largest restaurant chain in terms of units (WSJ)
The New Rules of Retail: How brands can survive the retail upheaval (LA Times)
Face of retail shopping altered: Mass merchandisers, online stores compete for purchases (Tallahassee.com)
Kronos Retail Labor Index Shows Many Seeking Retail Jobs, Few Getting Hired (Business Wire)

Weekly Retail Sales Strong in Final Week of February

Published March 1, 2011 Uncategorized Leave a Comment
Tags: icsc, johnson redbook, retail sales, same-store sales, shoppertrak, thomson reuters

Retail sales finished off February on a strong note, as year-on-year gains for the week ending Feb 26th were the strongest since the first week of the new year. Business was driven by the three events during the month – Super Bowl, Valentine’s Day and President’s Day – as well as solid demand for spring merchandise at near-full prices.

Nearly thirty major retailers will report February sales performance on Thursday, and Thomson Reuters expects them to collectively show a same-store sales gain of 3.8% compared to last year. While analysts only expected a 2.7% increase in January, same-store sales actually rose 4.9% even in the face of severe winter weather across much of the country. We believe the storms last month drove business into February, and with plenty of event-driven shopping during the month, expect the final tally will once again beat estimates.

However, rising gas prices are beginning to weigh on the minds of consumers – prices at the pump hit $3.38 per gallon on February 28th according to the U.S. Energy Information Agency (EIA), up 25% from last year and the highest since October 2008. Economists estimate each 1 cent increase in gas prices takes $1 billion out of consumers’ pockets, and according to a January survey from America’s Research Group, 65% of consumers will slow spending when gas hits $3.75 a gallon, which is nearly double the 38% who cut back spending when gas hit $4.00 a gallon several years ago.

For the week ending Feb. 26th, The International Council of Shopping Centers (ICSC) reported that chain store sales slipped for the 6th time in 8 weeks so far in 2011, falling 0.5% from the prior week, while sales rose 3.0% compared to the year-ago period. Warmer weather drove demand for seasonal spring merchandise, but rising gas prices are starting to reduce consumers’ purchasing power.

“Sales were choppy during the month with typical weather impacts that tend to get amplified in low volume months—such as February—and a calendar shift in the Presidents’ Day holiday compared with the prior year,” said Michael Niemira, ICSC vice president of research and chief economist. “But overall, the month’s trend performance was good and likely helped by an improving economy, despite some increasing drag from rising gasoline prices.” Continue reading ‘Weekly Retail Sales Strong in Final Week of February’

Winter Weather Once Again Slams Retail

Published February 1, 2011 Uncategorized Leave a Comment
Tags: icsc, johnson redbook, retail, same-store sales

It’s beginning to sound like a broken record: retail sales were soft for the fourth consecutive week as cold and wintry weather once again hampered business. Thomson Reuters estimates same-store sales for January rose 2.8% from the year ago period. However, based on weekly sales tracking we expect results to disappoint when retailers report monthly results this Thursday.

For the week ending Jan. 29th, which is also the fiscal year-end for most retailers, The International Council of Shopping Centers (ICSC) reported that chain store sales slipped for the fourth week in a row, down 1.0% from the prior week, while sales rose just 1.6% compared to the year-ago period.

“Adverse weather continued to derail the consumers’ ability to shop this past week and throughout January,” said Michael Niemira, ICSC vice president of research and chief economist. “Retailers have experienced a battery of severe storms throughout the month that will tend to accentuate the weather-induced sales weakness, given January is traditionally a low-volume month for sales,”

ICSC projects that same-store sales in January rose 1.5-2%, down from their initial forecast for a gain of 2.5%. However, for all of 2011 sales are still expected to increase 3-3.5%.

Redbook Research said that same-store sales posted a 1.8% last week, the smallest YoY gain since May 1st of last year as winter weather once again hampered sales. Month-to-date, sales were up 2.3% compared to last January, but down 0.9% relative to December.

“Cold temperatures are typically welcome during winter clearances, but in this case severe snowstorms kept shoppers at home and forced stores to close.” said Catlin Levis, Redbook analyst. She added “This affected performance of retailers with regional exposure to the eastern and southern parts of the country.”

Redbook noted that February contains three major events: the Super Bowl, Valentine’s Day and President’s Day, and expects same-store sales growth of 1.8% next month.

January and February are typically the lightest months of the year in terms of volume, so we are not reading too heavily into this early year weakness. However, retailers are already discounting spring merchandise and we are anxious to see the effects on margins and guidance for the first quarter when companies begin reporting earnings over the next few weeks.

Weekly Sales Chilled by Winter Weather

Published January 19, 2011 Uncategorized 1 Comment
Tags: chain store sales, icsc, johnson redbook, retail, same-store sales

Chain store sales cooled off in the second week of January, as cold and wintry weather kept shoppers at home and consumers’ appetite for clearance sales waned.

The International Council of Shopping Centers (ICSC) reported that chain store sales rose just 1.4% from the year-ago period, the slowest pace since May 22nd, while sales were down 0.1% compared to the prior week.

“Last week’s disruptive weather once again accentuated the weakness in sales,” said Michael Niemira, ICSC’s chief economist. “Since January is a low-volume month for sales and more susceptible to weather impacts and other volatility, the recent weakness is not very meaningful-even though the month is shaping up softer than recent trends.”

ICSC also mentioned that the rising price of gas is most likely eating into discretionary spending, as average gas prices are 13.3% higher than a year ago and the highest since October 2008.

Redbook Research said that same-store sales posted a 2.5% increase for the week ending January 15th, following a 2.8% gain the prior week. Month-to-date, sales are up 2.7% compared to last January, but down 0.6% relative to December.

“Cold and inclement weather kept shopper at home and consumers’ appetite for clearance bargains seemed to have been at least partially satiated.” said Catlin Levis, Redbook analyst. She added “Year-end clearances dominated sales activity, and soft goods continue to outperform hard goods, with cold weather driving demand for winter outerwear and accessories.”

January and February are typically the lightest-volume months of the year, so we are not reading too much into the relative weakness so far this month. Retailers are beginning to stock up for Valentine’s Day and spring merchandise will soon be rolled out, but we don’t expect a significant pick-up in business until early March.