Retail Sales Miss the Mark
Updated from 9:47 a.m. EDT
U.S. retail chains reported another soft month of sales on Thursday as bad weather and high gas prices kept shoppers at bay in June.
The results fueled Wall Street's concerns about consumer spending, but analysts were quick to point out that retailers were facing their toughest monthly comparisons in over a year.
Ken Perkins, president of RetailMetrics LLC, said his firm's index tracking over 60 major retailers showed a 2.8% overall increase in same-store sales for the month, missing its previous forecast that called for a 3% gain.Perkins called the results a "mixed bag," noting that, excluding Wal-Mart's (WMT) lackluster performance, the index rose by a respectable 4.4%. Last June, the index posted a gain of 5.4%, so many retailers faced high hurdles this time around. Meanwhile, heavy rains and flooding across several regions of the country made for a tough business climate. "As for the broader picture, it does look like the economy is starting to slow here a bit thanks to high oil prices and the slowing housing market, but as the job market continues to show strength, it's hard to say that those factors are affecting these sales figures here," says Perkins. "We'll be watching July numbers very closely. This is the third soft month in the last five, so continued softness would really show that the consumer is starting to feel some fatigue." Wal-Mart, the world's largest retailer, said its same-store sales rose 1.2%, matching a forecast provided last weekend. Wal-Mart pegged second-quarter earnings at 70 cents to 74 cents a share; analysts were calling for 73 cents a share. Wal-Mart's chief competitor, Target (TGT), beat expectations with a 4.8% jump in June comps. Wall Street's estimate called for a 4.3% gain, according to Thomson First Call. The retailer said it expects to meet or surpass analysts' estimate for second-quarter earnings of 69 cents a share. Target also forecast that its July same-store sales will increase in a range between 4% and 6%. To watch Nat Worden's discussion with Farnoosh Torabi about same-store sales, please click here.
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