July Retail Sales Strong, Despite Unpleasant Surprises

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NEW YORK – U.S. retail sales came in slightly better than expected in July, but the strong results didn’t extend to Gap or Pacific Sunwear.

Jos. A. Bank continued its torrid performance, landing with a 15.9% increase in comparable-store sales, while Men’s Wearhouse managed a 2.0% lift versus July 2005.

While American Eagle came in at 7.0% up for the month and Abercrombie & Fitch was up 3.0%, other teen retailers lagged. Pac Sun’s 10.6% drop led it to reduce earnings guidance, and drop sharply in Wall Street trading, and Aeropostale was down 1.9%, versus a projection of 3% to 5% up by Goldman Sachs. Gap continued to struggle – Old Navy and Banana Republic were flat, while Gap stores dropped 13.0% in the U.S. and 6.0% abroad.

Taken by sector, department and discount stores were up 3.2% each, according to Goldman Sachs, and specialty and off-price stores up 2.1%. All were 0.2 to 0.3% above GS’s estimate. Kohl’s and Nordstrom topped the department stores, at 5.9% and 5.3% up, respectively, and J.C. Penney barely missed the 5% line, advancing 4.9%.

Below, a selection of 21 stores reporting results, ranked in descending order of same-store sales results:

July Same-Store Sales Results
StoreSSS*
Jos. A. Bank15.9%
Guess10.7%
Costco7.1%
American Eagle7.0%
Kohl’s5.9%
Nordstrom5.3%
J.C. Penney4.9%
TJX Cos.4.0%
Federated3.3%
Target3.1%
Abercrombie & Fitch3.0%
Wal-Mart2.4%
Saks2.4%
Men’s Wearhouse2.0%
BJ’s1.9%
Ross Stores1.0%
Aeropostale-1.9%
Dillard’s-3.0%
Gap-4.0%
Hot Topic-7.2%
Pacific Sunwear-10.6%
Goldman Sachs July Composite Index
ActualEstimate
Department Stores3.2%3.0%
Specialty/Off-Price stores2.1%1.9%
Discount Stores3.2%2.9%
Composite3.1%2.8%

* SSS = same-store sales results

Men’s Wearhouse numbers are for U.S. stores only

SOURCES: Company reports, Goldman Sachs

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