Sozzi: A Steaming Pile of Retail

Editor's Note: This article was originally published at 12:00 p.m. on Real Money on July 11. Sign up for a free trial of Real Money.

June same-store sales data, released Thursday, was a heaping pile of ugliness in the context of an improving labor market -- and retailers continue to be promote around the clock, both in-store and online. Note that Internet-based sales are making the same-store-sales metric outdated, except for those that include online sales in their "comp."

In any case, of the eight retailers still reporting these increasingly relevant numbers, only Zumiez (ZUMZ) managed to hike guidance. Come to think of it, the Zumiez numbers were rather strong -- considering the hyper-competitive specialty-apparel market, I have no idea how it managed to log increases in average transaction value and average unit retail prices.

On the other hand, Gap (GPS) came out with a steaming pile of dung after the bell Thursday. Its June sales fell short of consensus and, in my view, this is the precursor for an earnings print -- due next month -- that should be in-line to slightly disappointing. Gap may be banking too much on a purported July 4 spending spree, which it perhaps believes will offset probable weak traffic in the rest of the month. (A strong July 4 weekend was hinted at, believe it or not, by Family Dollar (FDO) CEO Howard Levine Thursday.)

The overall lack of second-quarter guidance boosts was disturbing considering the economic data we have been receiving -- and given that retailers are two months through the second quarter. Yes, we had the good weather in June, and now in July. Also, yes, there was the pre-July 4 buying and the insight into July 4 weekend -- though executives didn't even mention sales trends on the latter. However, nothing truly positive stood out in these numbers, and yesterday's negative stock reactions said it all.

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