School Sales, High Prices and Other Weirdness


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Consumers may have had classrooms in mind in July, as overall retail sales met or beat Wall Street expectations, but a handful of merchants provided lessons that in many ways defy basic math.

Courtesy of The Street, here are four merchants that released what it described as “weird” same-store sales reports. Two of them hint at what may be an unwelcome (if not weird) trend to consumers – thoughts of higher prices:

The Gap: The operator of the Gap, Banana Republic and Old Navy saw sales at stores open at least a year drop 5 percent in July, worse than 0.7 percent decline analysts had predicted. Broken down, the Gap stores posted a 6 percent sales decrease; Banana Republic reported a drop of 4 percent and Old Navy, 3 percent.

Yet the multi-tiered merchant projects its earnings will surpass analysts’ estimates for the second quarter, with a profit of 33 to 34 cents per share, compared with forecasts of 29 cents.

Zumiez: The skate- and surf-inspired retailer, which has been a star in the teen space despite its reluctance to slash prices, reported a sales increase that was well below expectations – 4.9 percent, vs. the 7.5 percent outlook.

The company said sales dropped off toward the end of the month as shoppers sought out “‘wear now” products. As for prices, The Street reports that management “has been clear that it will respond to the customer’s willingness to accept higher prices and act accordingly.”

Kohl’s: The value-priced department store chain reported a surprise decline in same-store sales – down 4.6 percent when analysts projected a 3.4 percent gain. Yet at the same time management raised its second-quarter profit outlook to $1.07 to $1.08 per share, form 96 cents to $1.02.

The retailer said its ability to manage inventory and expenses resulted in better-than-expected margins and expenses. Meanwhile, customer reactions to higher apparel prices are in line with expectations.

Target: The popular mass merchant actually beat estimates, with comp sales up by 4.1 percent, vs. the expected 3.7 percent.

Target attributed the better-than-expected report to shoppers buying more grocery, health and beauty items. So what’s so weird about that? To The Street, what is weird is the overall strength of the report, which includes a comeback in apparel and gains cross all geographies.

And no word, fortunately, about higher prices.

Lisa Biank Fasig
Lisa leads the creation of editorials and feature stories for COLLOQUY and oversees the work of contributing editors and writers. With 18 years of reporting experience, most in business and specifically consumer behavior, she is highly skilled at researching data and teasing out the trends. A background in graphic design enables her to see ideas in three dimensions and tell the story visually.


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