(Stock prices added.)
NEW YORK (
) -- August is the last month retailers will be up against difficult sales comparisons. But as the targets get easier to hit in September, can those retailers prove a turnaround is really in effect?
It is, to be sure, a hard month to figure: The benefits of the tax-free shift from July into August are being offset by a later Labor Day, which has delayed back-to-school shopping, rendering August something of a non-event.
As a result, investors should care less about this month than what happens in September -- the month that, in 2007, began a two-year negative run in same-store sales. Those easier comparisons next month should help struggling retailers like
Abercrombie & Fitch
September's Sector Check
Still, with respect to August, the going has been tough. Retail sales for the week that ended Aug. 29 declined 0.5%, according to the International Council of Shopping Centers and Goldman Sachs. On a year-over-year basis, sales were down 0.7%.
Likewise, ICSC is predicting same-store sales will fall between 3.5% and 4% during the month.
American Eagle Outfitters
faced its hardest comparison on a two-year basis in August, and J.P. Morgan analyst Brian Tunick expects same-store sales to fall between 6% and 8%.
The teen retailer was heavily promotional during the month, especially in its denim business. A while the women's side of its business is improving, its men's performance remains challenged.
provide, at least for teen retailers, is an inside look into the third quarter, which will be heavily affected by back-to-school shopping.
will be in the spotlight, as expectations are high. Investors are waiting to see if the specialty retailer's
and marketing efforts during the month will prove fruitful.
Department stores and discounters (minus
) are expected to be hit the hardest. Citi's same-store sales index forecasts both sectors posting a 6.2% decline.
will continue to struggle as high-end shoppers remain discriminate in their purchases. Stifel Nicolaus analyst Richard Jaffe forecasts same-store sales down around 12%.
And while Kohl's
has the easiest comparisons of the department-store sector and customers have been responding favorably to its private-label and exclusive merchandise, Jaffe still expects same-store sales to fall between 3% and 5%.
Wholesalers are still feeling the pinch from lower prices at the pump and food deflation.
is expected to fall between 5% and 6%, while
is forecast to fall 7% to 8%, Jaffe said.
announced during its second-quarter earnings call that initial August sales showed a modest improvement, it will still need a boost in its apparel division for a turnaround.
The surprise winner of the month will be drugstores --
-- according to Citi's same-store sales index, which forecasts a 4% uptick in the sector.
Shoppers are forgoing traditional back-to-school supply stores like
, and flocking to drugstores for pens, paper and notebooks.
And, once again, off-price retailers are expected to outperform. Tunick predicts both
will be up between 2% and 4%.
Meanwhile, Tunick expects
to continue to pull ahead of the pack, forecasting the company to be up 7% to 9% during the month.
Shares of retailers were in the red Tuesday afternoon ahead of the results. The S&P Retail Index dropped 2% to 357.03, dragged down by teen and women's retailers.
( WTSLA) tanked 7% to $3.27,
Pacific Sunwear of California
fell 8.5% to $4.05 and
dropped 7% to $11.73.
On the women's front,
slid 5% to $7.05,
sank 6% to $12,
was down 6% to $4.91 and
New York & Company
declined 6.5% to $4.33.
-- Reported by Jeanine Poggi in New York.
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