July retail sales saw gains in categories like clothing and sporting goods that got a back-to-school bump, but unexpected declines in building materials and furniture stores evened things out for the month, bringing overall retail sales to a 0.3 percent seasonally adjusted increase from June and 5 percent growth over a year ago. It's the 13th consecutive month of retail sales growth, according to the National Retail Federation.
"Consumers continue to grind forward in July," said NRF president and CEO Matthew Shay. "However, consumers alone can't be expected to shoulder the burden of the economy. Fiscal and monetary policy uncertainties combined with stagnant economic and employment conditions continue to breed a volatile market with extreme swings in consumer spending."
Both Kohl's and Dillard's benefited from the back-to-school rush for clothing, with Dillard's collecting $36.5 million in net income for the quarter ended August 3, compared with $31 million in the same period last year, while Kohl's total sales increased 2 percent to $4.29 billion in the same quarter. Kohl's, however, did see a decrease in net income, while earnings rose from $1 to $1.04, missing analyst estimates of $1.05 per share.
Walgreen's also saw an 8 percent boost in sales for the month of July, totaling $6.03 billion up from $5.59 for the same month last year. Comparable stores also benefited from positive calendar shifts that resulted in one additional Wednesday and one fewer Sunday compared with last July, resulting in a 2.2 percent increase in prescriptions filled. An increased percentage of Express Scripts prescriptions returning to Walgreen's pharmacies also boosted July numbers.
Sport Chalet was the exception, especially among sports retailers. The company posted a loss of $2.8 million in the first quarter, compared with a $100,000 profit a year ago, as well as a 2.8 percent drop in sales. The retailer has been trying to reverse that trend with a new next-gen store in downtown Los Angeles, and CEO Craig Levra is confident of better days ahead.
"We are making solid headway in implementing our recently announced strategic initiatives," he said. "With our expanded, five-year $75.0 million credit facility, we have ample resources to execute our plan."
NRF chief economist Jack Kleinhenz, though, seemed decidedly less optimistic about the future of consumer spending habits.
"Spending has stalled, and the economy is stuck in neutral," he said. "Even with modest employment gains and steady consumer confidence, Americans remain in a cautiously-positive spending pattern. …This month's retail sales report will make any decision on tapering that much harder."
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