Analysts Concerned About Slow September Retail Growth, Despite Modest Gains

While some retailers such as Stein Mart (Nasdaq: SMRT) posted revenue gains in September, economists are concerned about slow retail growth and retailer earnings during the month.

Some retailers – especially teen-focused brands – reported monthly earnings below analysts' expectations. Some apparel and other retailers were impacted by increased promotions, continued weak mall traffic, and slower sales of warm-weather clothing.

Teen retailer Buckle Inc. (NYSE: BKE) was one of the worst performers of the month, posting a 4.5 percent decline in same-store sales. Analysts had anticipated an increase of 1.2 percent.

"Back-to-school sales were lackluster at best…and the fashion cycle was uninspiring," Ken Perkins of Retail Metrics told The Wall Street Journal. Plus, consumers continued to focus on bigger-ticket purchases such as cars, housing and student loans, Perkins said. Warmer fall weather also likely dampened sales of sweaters and other winter clothes.

Costco Wholesale (Nasdaq: COST) reported that revenue at stores open at least a year rose 3 percent, below the 3.7 percent gain that was anticipated by Wall Street. L Brands (NYSE: LTD), the parent company of Victoria's Secret, reported that revenue at stores open at least a year rose 1 percent in September, less than the 2 percent gain that analysts expected.

At the same time, the International Council of Shopping Centers reported a revenue increase of 2.7 percent for stores open at least a year, according to its preliminary tally.

In addition, Stein Mart (NASDAQ: SMRT) reported that total sales for the five-week period ending October 5 increased 7.3 percent and comparable store sales increased 5 percent. The retailer said that linens, ladies' boutique, gifts, ladies' career sportswear and ladies' posted the strongest sales for the month, while ladies' accessories, men's furnishings, ladies' casual sportswear and petites were more challenged.

Discount retailer Fred's Inc. (Nasdaq: FRED) also reported that same-store sales rose 2.8 percent last month, topping analysts' expectations of 2.3 percent sales growth. Pharmacy sales and script growth were key to the retailer's performance in September.

For more, see:
This Washington Post article
This The Wall Street Journal article
This Stein Mart statement

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