Federated Department Stores (Cincinnati) has reported that sales for August are so far running below already-weak expectations. And Wal-Mart Stores (Bentonville, Ark.) said that hot weather is hurting back-to-school sales.
The world's No. 1 retailer said same-store sales were running at the low end of its forecast for a 4 – 6 percent increase in August, and that warm weather was dampening back-to-school sales. Wal-Mart said, in a record statement for investors, that back-to-school sales were “off to a slow start as warm weather has affected apparel sales.”
Federated said same-store sales were running below company forecasts in the first two weeks of August. It has said it expected same-store sales to be down 1 percent to 3 percent in the four-week August sales period.
On the other hand, J.C. Penney Co. Inc. (Plano, Texas) said its back-to-school sales were going “better than expected.” The retailer had previously forecast that August department store sales would be little changed to slightly higher compared with a year earlier.
Penney said children's, fine jewelry and women's and men's apparel were among its best-selling divisions. One analyst noted that Penney had been hurt in the second quarter by lack of stock in some keys items. Sales may have been helped because it replenished those stocks, he said.
Though retail spending has been down as the U.S. economic recovery falters, retailers were hoping that the back-to-school season (second only to the holiday season as a key barometer of success or failure) would drive a rebound. But with temperatures around the country staying above 90 degrees, shoppers have appeared reluctant to buy fall clothes. They clearly prefer picking among what's left of the summer inventory, at severely discounted prices.