June Same Store Sales Summary

Transcription

1 June Retail Comps Summary: June results were very mixed among our collection of retailers. With comps ranging from -18.6% at Nordstrom to +5.8% at Walmart, there were few posting postive results. Interestingly, those that were positive were positioned in different demographic sectors. PacSun (teen/action sport) was positive against an positive result last year. Also interesting to note were the differences among certain peer competitors. Nordstrom had negative comps whiles Saks results were positive. Target and Walmart were both positive, while Old Navy was negative in the double digits. Results that might speak more to the merchandising mix than economic demographics. June Same Store Sales Summary June-Actual June Fore June LY Wet Seal WTSLA -2.9% -3.0% 2.8% Pacific Sunwear PSUN 3.0% -1.8% 3.0% Charlotte Russe CHIC Zumiez, Inc. ZUMZ -3.4% 0.8% 13.7% Limited, Inc. LTD -9.0% -7.4% 3.0% Hot Topic, Inc. HOTT -0.3% -3.1% -4.0% Bebe, Inc. (Quarterly only) BEBE -5.6% n/a -5.7% Talbots, Inc. TLB Nordstrom, Inc. JWN -18.6% -18.6% 2.0% Ann Taylor, Inc. ANN American Eagle Outfitters AEO -11.0% -8.9% 8.0% Abercrombie & Fitch ANF -3.0% -2.8% 2.0% Walmart WMT 5.8% 3.8% 2.4% Target TGT 0.4% -0.5% 3.3% Saks SKS 1.9% 6.5% -5.6% Gap Inc. GPS -7.0% -11.6% -5.0% Company commentary on E-Commerce: Hot Topic Revenue levels are flat versus LY. American Eagle Outfitters June revenues increased 20% versus LY Abercrombie & Fitch June revs of $20.3m, YTD revenues of $100.1m Forward Looking Comp Guidance Limited, Inc. Negative Mid-High single digit comps Hot Topic, Inc Negative Low-Mid single digits comps Target Forecasted comps of -1.0% to +1.0% Saks Incorporated Q2 Modestly negatively comp sales American Eagle Outfitters Maintaining Q2 earnings guidance. Walmart July comps of +2.0% to +4.0% Wet Seal, Inc: Comp sales for Wet Seal were -2.9%, which were better than the -3.0% forecasted by analysts. The June results compare to a prior year comp level of +2.8%. Both concepts experienced a decline in comps with a -0.8% decline at Wet Seal and -10.7% at Arden B.. Company management is attributing the achievement of it s revenue and comp performance to an improved merchandising mix, which as yet to hit Arden B. due to the lengthier lead times for product at that concept. There was no call or further commentary on results by category or margin performance. There was also no information provided on their direct business.

2 Pacific Sunwear: Comp sales for Pac Sun were also better than expected. June comps were +3.0% versus an expected decline of -1.8%. Results were in comparison to a +3.0% in the prior year. The company experienced strong sales in the Texas and Mid-West regions (similar to May), but experienced weaker results in the Florida, California, Northeast, and Desert Southwest regions (also weak in May). By segment, revenues were as follows: Juniors 30% Young Men s 6% Footwear down low-40 s (*) Accessories high teens By category, the Juniors segment experienced strength in bullhead denim, tops, swim, and dresses. In the Young Men s segment, strong categories were bullhead denim, shorts, and tops. The company experienced average transaction activity per store that increased in the Low-Teens, along with an average transaction value that was also down in the Low-Single Digits. There was no further info on margin performance overall or by category. There was also no information provided on their direct business. *The drastic drop in Footwear results is entirely attributed to the company s exit from the footwear business in all store locations. It should be noted that Footwear accounted for revenues in of $222m, $201m, and $175m, respectively. However, the company has also issued additional press releases that they will be moving back into the footwear segment at selected locations. Zumiez, Inc.: Comp sales for Zumiez were weaker than expected. June comps were -3.4% versus analyst forecast of +0.8%. Creating some pressure was a strong +13.7% comp from the prior year, which they were unable to improve on. Overall, the company attributed the negative comps to decreases in Accessories, Juniors, Mens, and Boys Apparel. These negative comps were offset by strength in Footwear and Skate. The company experienced a decline in the average number of transactions per store, which was offset by an increase in the average unit transaction value. There was no further info on margin performance overall or by category. During morning trading, ZUMZ stock was down 23% for the day and has declined 75% from the year high. Limited, Inc: Results were below expectations at the Limited, which posted June comp sales of -9.0%, which compared to analyst forecasts of -7.4%, and a prior year comp of +3.0%. While the company experienced positive comps at Victoria Secret Direct and La Senza, it wasn t enough to offset the weakness in Victoria Secret stores (- 12.0%) or Bath & Body Works (-8.0%). The company commented that merchandise margins were significantly above expectations and that inventories continue to be well managed and controlled. The Company has achieved a 22% reduction in inventory per square foot on a cost-basis. The Company is also maintaining its significant marketing efforts for Pink through Q3. The company also noted in the call it expected continued weakness into July with a projected negative comp in the Mid- to High-Single digits. Hot Topic, Inc.: Hot Topic also came in better than expected with a comp level of -0.3% versus a forecasted drop of -3.1%. The results compare to a PY comp of -4.0%. The company has been aggressively trying to correct their merchandising mix over the last year. On the call, management also noted that promotional activity was significantly down versus last year. It was also mentioned that while results were fairly consistent across the regions, there was strength noted in the Texas, Midwest, and Northeast regions. For the month, transaction count increased in the Low-Single digits, while average transaction value decreased in the Low-Single digits. By segment within Hot Topic: Accessories 4.0% Music 10.0% Womens 3.0%

3 Mens HotTopic.com 16.0% 5.8% For the Torrid concept, comps decreased 0.8% versus an increase of 3.8% LY.. There were no comments this month on Torrid.com revenues, which increased 33.0% in May versus PY. There was no further info on margin performance overall or by category. Bebe stores, Inc.: bebe stores reported a Q4 comp result of -5.6% versus PY results of -5.7%. There was no estimate on comps available for the Quarter. During the call, management commented that comps were negative in all regions, with some favorability experienced in the Northeast. The worst performing areas were Northern California, AZ, and Las Vegas. Management commented that comps were negative in each of the three months but showed improvement in May and June. The company was able to effectively decrease inventory levels per square foot by 8.5%. For the Quarter, the number of comp transactions declined by 8% and the average value per transaction declined by 3%. There was no further info on margin performance overall or by category. There was also no info released on e-commerce. Nordstrom, Inc.: Nordstrom posted significantly lower comp sales of -18.6% versus a forecasted comp of -18.6%, and compares to a prior year comp of +2.0%. The increase in comp was almost entirely attributed to an early scheduling of the Half-Yearly Womens & Kids Sale, which is typically held on June, but occurred in May this year. The company advised that their May & June results should be viewed on a consolidated basis to have a more accurate picture of results during the period. Management commented that there were significantly higher levels of markdowns versus PY regarding recent sales activities. For the month, the Company experience strong comps in the South, Midwest, and Northwest, which was offset by weakness in the California market. Comps for both the month and the quarter are positive within the Rack stores, increasing 5.5% and 6.2%, respectively. There was no further info on margin performance overall or by category. American Eagle Outfitters: American Eagle performed significantly worse than expected estimates. The company posted a decline in June comp sales of -11.0% versus a forecast of -8.9%, and a prior year comp of +8.0%. During the call, management advised that Guys comps increased Slightly, while Girls declined in the High-Teens. Comps were further affected by a decrease in both the average number of transactions per store in the Low-Teens, offset by a Mid-Single digit increase in the average transaction value. The company also experienced lower than planned markdowns. By category, Guys increased Slightly while Girls decreased in the High-Teens. Comps were down in all regions and no one region was characterized. It was noted on the call that revenue on the company site increased 20%. There was no further info on margin performance overall or by category. Abercrombie & Fitch: A&F was inline with expectations reporting a -3.0% decline in comps versus a forecast of - 2.8%, which compares to PY results of 2.0%. On the Abercrombie side, Mens comps increased in the Low-Teens while Womens comps decreased in the Mid-Single digits. The average number of transactions per store decreased by 6.0% while the average value increased by 11.0%. For Kids, comps overall were down by -8.0% with the average number of transactions per store down by -15.0% with the average value increasing by +8.0%. Girls revenue declined in the Low-Double Digits while Boys increased in the Low-Single digits. In the Hollister concept, Dudes increased in the Mid-Single digits and Betty decreased in the Low-Teens. The average number of transactions per store decreased by -13.0% and the average value increased by +4.0%.

4 By category, areas of strength in the Masculine offer were Knits, Fragrance, Shorts, and Jeans. Weakness was encountered in Graphic T s and Swim. On the Feminine side, strength was seen in Jeans and Swimwear, offset by weakness in Graphic T s and Knit Tops. From a regional perspective, results continued to be strong in US-based tourist stores and International, offset by weakness in mall-based locations in the West and Midwest. Mall-based locations in the Southwest were strong. There was no further info on margin performance overall or by category. There was also no data provided for the direct business. Walmart (results are ex-fuel): Walmart posted June comp results of +5.8% versus a Forecast of 3.8% and PY results of 2.4%. There was no recorded commentary. As stated in the press release: All six merchandise units (grocery, entertainment, health and wellness, apparel, home and hardlines) achieved comparable store sales increases in the June five-week period. The strongest results remain in grocery, entertainment and health and wellness. Favorable weather and improved assortments helped drive seasonal sales in apparel, toys and hardlines. In addition, the economic stimulus checks contributed to increases in overall comparable store traffic results. Sales in entertainment were strong, with flat panel television sets continuing to run high double-digit comparable store increases. Within apparel, sales of swimwear and sportswear were strong. Sam's Club Sam's Club sales during the June period had strengths in fresh foods, dry grocery and consumables. Video games and mattresses were among the best performing general merchandise categories. House wares and jewelry were soft. Seasonal hardline sales were also behind plan. There was also no data provided for the direct business. Target: Walmart posted June comp results of +0.4% versus a Forecast of -0.5% and PY results of +3.3%. As stated in the press release: The best-performing category was consumables, In the discretionary segment, apparel same-store sales were flat, the best performance for apparel in more than six months. Home products were among the weaker sellers, with same-store sales of housewares flat and same-store sales of decorative home and garden products down in the double digits. By region, comps were strongest in the Northeast and weakest in the West, including Florida, Nevada, Arizona, and California. There was also no data provided for the direct business. Saks Incorporated: Walmart posted June comp results of +1.9% versus a Forecast of +6.5% and PY results of -5.6%. As stated in the press release: For June, the strongest categories at Saks Fifth Avenue were men s contemporary apparel, sportswear, and shoes; jewelry; accessories; and cosmetics and fragrances. The weakest categories at Saks Fifth Avenue for June were women s apparel and men s clothing. Saks Direct and Saks Off 5th performed well for the month. For the second quarter in the aggregate, management has adjusted its outlook and now expects modestly negative comparable store sales and a relatively flat year-over-year gross margin rate. Management continues to expect that inventory levels generally will remain in-line with the Company s sales expectations throughout the balance of the year. Gap, Inc.: Gap posted results better than expectations with a June comp of -7.0%, which compared to a Forecast of -11.6% and PY results of -5.0%. Management stated on the call that margins were significantly higher than last year. Also noted on the call were strong results in the Northeast, which were offset by weak results in the West.

5 At Gap, Kids results were stronger than Baby & Adult, while Womens was stronger than Mens. Within the Mens category, strong performers were Shorts, T-shirts, and Knit Tops. In the Womens category, strong areas included Denim, Woven Dresses, and Knit Tops. At Banana Republic, Womens sales were stronger than Mens. In the Womens offering, strong items included Dresses, Wovens, and Knits. In the Mens offering, strength was realized in Sweaters, Outerwear, and Knits. By concept, comp results are as follows: Gap North America 5.0% Banana Republic N.A. 5.0% Old Navy North America 10.0% Gap International 7.0%