Retailers have reported a late but welcome back-to-school buying spree, helping many rebound in August from July's sluggish pace. The surge might have been due to a growing trend among schools to start classes later and by teens’ tendencies to do their shopping once they see what their friends are wearing. There was also a shift in a tax-free sales week to August in two critical states, Florida and Texas.
However, analysts are still worried that the weakening housing market and higher food and gas prices will curtail shopping in the critical months ahead, according to the Associated Press.
Winners included Wal-Mart Stores Inc., Target Corp., Pacific Sunwear of California and Saks Inc. Wal-Mart posted a 3.1 percent same-store sales increase. It said electronics, school supplies and children's apparel were among the top-selling categories.
Rival Target posted a 6.1 percent same-store sales gain.
Among higher-end retailers, Saks showed an 18.2 percent gain, Nordstrom was up 6.6 percent and Macy's posted a 2.4 percent gain, though the department store retailer acknowledged same-store sales could be down as much as 3 percent in September.
J.C. Penney reported a 4 percent drop in same-store sales, though results were better than the 5.3 percent decline Wall Street expected. Penney said monthly results were distorted by a change in the calendar that moved sales from the first few days of August into the July reporting period, when same-store sales jumped 10.8 percent.
Though Gap Inc. had a 1 percent drop in same-store sale, it was better than the 2 percent decline analysts expected. Ann Taylor, citing improving sales at both Ann Taylor stores and its lower-priced Loft division, posted a 2.9 percent gain. Limited Brands had a modest 1 percent rise in same-store sales, below the 1.4 percent forecast.
Teen retailers scored a strong rebound from sluggish results in July. Wet Seal reported a 1.7 percent gain in same-store sales, better than the 0.6 percent estimate. Abercrombie & Fitch had a 6 percent gain in same-store sales, while Pacific Sunwear posted a 9.6 percent gain.
However, analysts warned that the price-slashing and large discounts that brought shoppers into the stores could end up hurting profits and masking troubles that might spill out during the crucial holiday season.]
“[The outlook for the next couple of months] will be tougher than it is now,” Penney’s ceo Myron Ullman told The New York Times. Referring to shoppers’ anxiety about the economy, he said, “I do not see anything on the horizon that will turn this around.”