Retailers on today posted sales declines for August as shoppers held back on back-to-school purchases and continued to focus on necessities, raising further concern about the upcoming holiday season.
Retailers on today posted sales declines for August as shoppers held back on back-to-school purchases and continued to focus on necessities, raising further concern about the upcoming holiday season.
Early reports showed six retailers missed analyst expectations while three exceeded estimates, according to a poll by Thomson Reuters.
As analysts look for signs of a recovery amid the recession, consumer spending is closely watched because it accounts for about 70 percent of economic activity. Thursday's results didn't offer much evidence of a comeback.
The teen sector was weak as back-to-school sales failed to take off. Hot Topic Inc. sales in stores open at least a year fell 8.1 percent, a bigger drop than the 6.9 percent predicted by analysts.
The Buckle Inc., typically an outperformer, said results rose but missed analyst expectations. Meanwhile, Zumiez Inc. and Wet Seal Inc. also reported results dropped but did better than analysts predicted.
Labor Day falls a week later this year, so some back-to-school buys are likely to come later.
Early results are "a bit of a mixed bag," said Ken Perkins, president of retail consulting firm Retail Metrics. "The initial read is a bit soft on the teen apparel side."
Still, he expects sales in stores open at least a year will fall 3.4 percent in August, not as bad as July's 4.7 percent drop.
August is expected to be the 12th consecutive month of declines in the measurement, considered important for retailers because it removes the effects of expansion.
Warehouse club operator Costco Wholesale Corp. says sales at stores open at least a year dipped 2 percent, but that was above analyst expectations. Excluding lower gas prices and the stronger dollar, results actually rose.
Costco said food is a best seller. The retailer also said it had a slight improvements in non-food categories such as sporting goods, toys, seasonal and hardware.
Limited Brands Inc., which operates Bath and Body Works and Victoria's Secret, said sales in stores open at least one year fell 4 percent, but that beat the 5.9 percent drop analysts expected.
