Bullish Same-Store Sales Growth Sets Earnings Bar High for Retailers

Joe Goldman |

GapSame-store sales results from June widely topped expectations, indicating a strong consumer and raising hopes for the upcoming earnings season.

Although only a handful of companies report monthly same-store sales, the results were predominantly positive. Here are some notable comparable sales numbers for the month of June.

Gap (GPS) reported outstanding same-store sales growth on Thursday, with 7 percent growth in June versus 4.7 percent expectations. High-end Banana Republic shrunk 1 percent, while Old Navy, Gap’s lower-end retailer, grew 13 percent.

Gap’s report is a good sign for clothing retailers everywhere, although weakness in Banana Republic could be somewhat foreboding for certain high-end companies. Shares rose almost one percent to $45.13 in trading on Monday.

Mega retailer Target (TGT) and warehouse wholesaler Costco (COST) easily topped expectations as well. Target posted 5.9 percent same-store sales growth versus 4.8 percent estimates, while Coscto came in at 6 percent compared to 5.2 percent estimates. Results from both companies will set the bar high for huge retailers like Wal-Mart (WMT) this summer.

American Apparel’s (APP) same-store sales growth affirmed a continuous bullish trend in e-commerce. The clothing manufacturer and retailer announced 7 percent same-store sales growth, driven by a 22 percent increase in online sales. Shares have more than doubled over the past twelve months.

The Buckle (BKE), a casual apparel retailer, said that comparable sales rose 3.4 percent. Cato (CATO), a women’s fashion retailer, reported similar numbers with 3 percent comparable sales growth.

Among the slowest growers were sports retailer Zumiez (ZUMZ) and Victora’s Secret parent company L Brands (LTD), which reported 1 percent and 0 percent comparable sales growth, respectively. 

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Companies

Symbol Name Price Change % Volume
BKE Buckle Inc. (The) 25.00 -0.03 -0.12 200,982
CATO Cato Corporation (The) Class A 33.52 -0.08 -0.24 71,843
COST Costco Wholesale Corporation 152.53 -0.62 -0.40 2,282,062
EXPH Expo Holding Inc 0.00 0.00 0.00 0
GPS Gap Inc. (The) 22.62 0.04 0.18 3,662,750
TGT Target Corporation 68.77 0.21 0.31 3,541,859
WMT Wal-Mart Stores Inc. 72.35 0.08 0.11 7,696,449
ZUMZ Zumiez Inc. 17.69 0.13 0.74 261,456

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