New York, September 3--The back-to-school shopping season got off to a sluggish start, as midprice department stores, discounters and specialty-apparel retailers rung up disappointing sales in August.
Sales at stores open at least a year -- known in the industry as same-store sales, a primary measure of a retailer's health -- rose 1.1% for the month ending Aug. 28, according to an index of 72 major U.S. chains compiled by the ICSC. The index was below the 3.1% gain in July and was the slowest pace since March 2003, when sales dipped 0.02%.
Across the board, retailers were up against tough year-to-year comparisons in August. Last year, results were bolstered by federal tax rebates and Labor Day sales. Hurricane Charley also hurt sales at several retailers this year.
Wal-Mart lowered its estimate for third-quarter sales gains to a range of 2% to 4%, from its initial target of a 3% to 5% increase. It also said third-quarter profit likely will be at the low end of its forecast of 52 cents to 54 cents a share.
Wal-Mart, posted a 0.5% increase in same-stores sales, as modest growth at its membership-warehouse Sam's Club unit largely was offset by disappointing back-to-school sales and temporary closures at some Wal-Mart stores because of Hurricane Charley.
The company said same-stores sales in its Wal-Mart Stores division crept up 0.1% in August, while its Sam's Club unit, which has sharpened its focus on catering to small-business owners, saw a 2.7% gain.
Wal-Mart reported total sales for the four weeks ended Aug. 27 of $21.2 billion, an 8.8% jump from the year-earlier period.
Target reported slightly better results, reflecting its ability to attract higher-end customers with its "cheap chic" merchandise. Same-store sales rose 1.8% and Target forecast a 2% to 4% gain in September same-store sales.
Costco Wholesale, also catering to higher-income shoppers at its membership warehouses, posted a 4% same-store sales gain, though that was below the 7.3% increase analysts forecast.
Upscale department stores posted strong gains. Neiman Marcus Group Inc., Dallas, said same-store sales jumped 15% for its Neiman Marcus Stores and Bergdorf Goodman units combined, citing strength in designer handbags.
Same-store sales at Nordstrom Inc. rose 7.2%, on brisk demand for accessories.
Midprice department stores continued to post lackluster sales. Federated Department Stores, Sears, and Dillard’s all reported lower same-store sales. The lone standout: J.C. Penney, where same-stores sales rose 3.8%, in part because of strong sales of back-to-school apparel.
