Jul 5, 2012
Costco, other retailers miss June sales estimates
Jul 5, 2012
Costco and other retail chains on Thursday reported June sales that missed Wall Street's lowered expectations as persistently high unemployment and falling consumer confidence took a toll on spending.
Smaller chains like Cato Corp, and teen apparel chain Wet Seal Inc and The Buckle Inc also reported sales at stores open at least a year that came in below estimates.
Costco Wholesale Corp reported a companywide 3 percent increase in same-store sales, below estimates of a 3.7 percent gain, hurt by unfavorable exchange rates. The warehouse club operator's U.S. sales also came in below Wall Street views.
"In June, the consumer put on a very cautious hat, they started pulling back," said Keith Jelinek, director in AlixPartners' global retail practice. He predicted shoppers would continue to be careful about splurging on non-essential items before children head back to school.
Limited Brands Inc was a standout among the first group of companies to post June sales, reporting a 7 percent same-store sales gain, led by its Victoria's Secret lingerie chain. Limited easily beat the estimate of a 2.7 percent gain.
Analysts expected 18 top retail chains to report a modest 2.4 percent in June same-store sales, according to the Thomson Reuters same-store sales index -- far less than the 7.7 percent gain a year earlier. The estimate excluded the Walgreen Co and Rite Aid Corp drugstore chains.
Macy's Inc and TJX Cos Inc also reported early Thursday. Kohl's Corp and Saks Inc were due to report later in the day.
A steady stream of weak economic reports, stubbornly high unemployment and a volatile stock market have weighed on shoppers. The Thomson Reuters/University of Michigan's consumer sentiment index tumbled to 73.2 in June from 79.3 in May.
The U.S. manufacturing sector grew in June at its most sluggish rate in 18 months as the pace of output, hiring and new orders all slowed, the Markit U.S. Manufacturing Purchasing Managers Index showed on Monday.
After retailers posted good results earlier in the spring, several analysts said warm weather may have spurred people to buy summers clothes earlier, simply shifting sales from later months like June.
The International Council of Shopping Centers (ICSC) on Tuesday trimmed its forecast for June same-store sales to a rise of 1 percent to 1.5 percent from an earlier forecast of 1.5 percent to 2 percent. It cited severe storms in late June that left millions in the mid-Atlantic without power.
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