Balmy June temperatures put shoppers in a buying mood for seasonal items and apparel, boosting sales at U.S. retailers for the third straight month.
Sales at stores open at least a year rose by a better-than-expected 5.5 percent, according to the Bank of Tokyo-Mitsubishi/Schroder & Co. The solid June gain follows impressive increases of 10.5 percent in April and 7.7 percent in May, two of the biggest increases in the last four years.
The strong three-month streak means most retailers won’t have to slash prices in July to clear out stocks and make room for fall merchandise.
That’s bad news for bargain hunters, who had a bonanza of markdowns to choose from at this time last year because a cool spring left retailers with full shelves. But it’s good news for retailer’s profit margins and bottom lines, analysts said.
“Consumer confidence is starting to be felt at the store level,” said Philip Abbenhaus, retail analyst with KPMG Peat Marwick in St. Louis.
June’s gains weren’t spread evenly, however. Mid-priced retailers didn’t fare as well as discounters and some specialty apparel chains.
Among the month’s top performers were Gap Inc., where same-store sales rose 15 percent, and Wal-Mart Stores Inc., where sales increased 9 percent. AnnTaylor Stores Corp., a women’s specialty chain that has posted a series of disappointing showings, came in with a 9 percent sales gain over last year.
Among Chicago-area retailers, Sears, Roebuck and Co. turned in a lackluster performance, with domestic same-store sales rising only 0.3 percent. That was down from 3.1 percent in June 1997.
Sears CEO Arthur Martinez credited the Hoffman Estates-based retailer’s “harder side” with pulling out the small increase. Sales of home appliances and electronics were strong, as were fine jewelry, cosmetics and home fashions on the “softer side,” he said.
Sears’ off-the-mall specialty stores, including its HomeLife furniture stores and Sears Hardware stores, also turned in strong performances.
Sears’ overall meager performance still outshone its nearest national competitor, J.C. Penney Co., where sales decreased 2.1 percent last month.
The poor showing prompted Penney to warn that its second-quarter earnings are likely to fall below last year’s 38 cents per share. The news torpedoed Penney stock, which dropped $5.81 to $65.62 a share.
But June results were much rosier for Dayton Hudson Corp.’s department stores, which include Marshall Field’s. Sales at its Department Store Division rose 7.1 percent, outpacing same-store sales growth of 6.0 percent at its fast-growing Target discount chain. Overall, Dayton Hudson’s same-store sales rose 4.6 percent.
Times continued to be tough for Spiegel Inc. The Downers Grove-based catalog and retail company said June sales fell 9 percent to $234.7 million from $258.5 million last year.
Sales at its Eddie Bauer casual clothing chain plummeted again, decreasing 12 percent on a same-store basis. Spiegel said Eddie Bauer’s catalog and credit businesses are showing improvements.
Kohl’s Corp., of Menomonee Falls, Wis., felt a lull in June with same-store sales rising by 4.9 percent. That compares to a 17.4 percent increase in May.
