U.S. same-store sales rise in July, helped by promotions
By Phil Wahba
(Reuters) - A group of large U.S. retailers on Thursday reported higher sales for July, but they had to use discounts to lure cost-conscious shoppers, raising concerns about the current back-to-school season.
Ten of the 11 U.S. retailers that still release monthly sales figures for stores open at least a year reported a combined 4.2 percent gain, just below the 4.4 percent increase analysts expected, according to Thomson Reuters. Gap Inc (GPS.N: Quote) will report after markets close.
The Standard & Poor's Retail Index .RLX. was up 0.4 percent in morning trading, outpacing a 0.1 percent gain for the broad S&P 500 .SPX.
Retail stocks took a hit earlier this week after American Eagle Outfitters Inc (AEO.N: Quote) said the pressure to slash prices was intense in July and that quarterly same-store sales fell 7 percent.
Costco Wholesale Corp COST.O said on Thursday that same-store sales rose 4 percent last month, below analysts' expectations of a 5.1 percent increase. Gasoline, which its members can buy at lower prices, sold well, but shoppers pulled back on big-ticket items like electronics.
Fred's Inc (FRED.O: Quote), a small discount chain, said promotions were what lifted same-store above expectations sales last month. Cato Corp CATO.N, which sells clothing, reported a 5 percent decline that Chief Executive Officer John Cato blamed on "continuing economic uncertainty."
L Brands Inc LTD.N, the parent company of Victoria's Secret and Bath & Body Works, was a stand-out, reporting a same-store sales gain of 3 percent for July, above forecasts for a 1.5 percent rise. Its shares rose 5 percent after it raised its profit outlook.
But shoppers remain stressed and are hunting for deals, experts said. Last month, U.S. employers slowed their pace of hiring, with the number of jobs outside the farming sector increasing less than economists expected. Continued...