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

Joe Goldman  |

Same-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. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CATO Cato Corporation (The) Class A 15.03 -0.24 -1.57 15,246 Trade
BKE Buckle Inc. (The) 17.87 0.21 1.16 85,711 Trade
TGT Target Corporation 72.38 0.18 0.25 1,238,974 Trade
COST Costco Wholesale Corporation 218.51 2.04 0.94 485,064 Trade
GPS Gap Inc. (The) 24.86 -0.22 -0.86 579,114 Trade
ZUMZ Zumiez Inc. 24.37 0.15 0.62 49,440 Trade
EXPH Expo Holding Inc 0.00 0.00 0.00 0
WMT Walmart Inc. 103.79 3.80 3.80 8,370,829 Trade

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