A Retail Bankruptcy and October Same-Store Sales (SYMS, COST, TGT, M, JWN, JCP, KSS, LTD, AEO, ZUMZ, BKE, WTSLA)November 3, 2011 by Paul Ausick
October is not usually a strong month for retailers because shoppers take a break between the back-to-school buying and the coming holiday season. In October 2010, same-store retail sales rose just 1.6% for a group of 23 retailers tracked by Thomson Reuters. This October, that increase is expected to rise to 4.5%. Syms Corp. (NYSE: SYMS), the discounter that owns Filene’s Basement, filed for bankruptcy protection yesterday, and won’t be participating in this year’s holiday extravaganza.
Some stores that will, though, are reporting October same-store sales today, including Costco Wholesale Corp. (NASDAQ: COST), Target Corp. (NYSE: TGT), Macy’s Inc. (NYSE: M), Nordstrom Inc. (NYSE: JWN), J.C. Penney Co. (NYSE: JCP), Kohl’s Corp. (NYSE: KSS), Limited Brands, Inc. (NYSE: LTD), American Eagle Outfitters, Inc. (NYSE: AEO), Zumiez Inc. (NASDAQ: ZUMZ), The Buckle, Inc. (NYSE: BKE), and Wet Seal Inc. (NASDAQ: WTSLA).
Costco reported an October same-store sales jump of 9%, and a total sales increase of 11%. For the first two months of its current quarter, Costco same-store sales have risen 10% and total sales are up 13%. In September, the company saw a same-store sales jump of 12%, indicating that October sales were, in fact, a bit slower. Analysts were expecting October sales to rise 9.2%.
Target’s same-store sales rose 3.3% in the month, nearly double the 1.7% increase the company posted in October 2010. That probably won’t be good enough, as analysts were expecting a rise of 4.2%.
Macy’s posted a 2.2% gain in October same-store sales, considerably below expectations of 3.6%. The company reports third-quarter earnings next week and said that it expects quarterly sales to rise 4%-4.5%, within its previous guidance.
Nordstrom posted a same-store sales gain in October of 5.4%, which did not meet analysts’ expectation of a 6.4% boost. The company reports third-quarter earnings next week, and is expected to post EPS of $0.58 on revenue of $2.36 billion.
J.C. Penney was expected to post a 1% gain in October same-store sales. Instead the company put up a -2.6% decline. Shares are down nearly -3% in the pre-market following the announcement.
Kohl’s reported a same-store sales jump of 3.9%, better than the expected 3.7%. The company also noted that it expected third-quarter EPS to be at the high end of previous guidance of $0./73-$0.79. The consensus analyst EPS estimate is $0.78.
Limited reported same-store sales up 6% in October, compared with an 11% rise in September. Analysts had been looking for a 6.2% rise in October sales. Despite the slight miss, the company raised its EPS guidance from $0.17-$0.22 to $0.22-$0-.24 for its third fiscal quarter, which ended in October. Limited reports third-quarter earnings on November 16th, and the consensus EPS estimate was $0.24, even before the company raised guidance.
American Eagle Outfitters reported third-quarter sales after markets closed yesterday. Same-store sales for the quarter rose 5%, compared with a rise of just 1% in the same period a year ago. Including the company’s online store, same-store sales rose 7% in the quarter. The company also narrowed its EPS guidance from a $0.22-$0.27 to $0.26-$0.27, well above the consensus estimate of $0.23. American Eagle will report third-quarter earnings on November 30th.
Zumiez reported same-store sales increased 3.3% in October and 6% for the quarter ended in October. For the month, analyst’s were expecting an increase of 2.8% in same-store sales. The company raised EPS guidance last month, and the consensus estimate is now $0.42.
The Buckle reported a same-store sales gain of 8.7% in October, and for the quarter, same-store sales are up 9.1%. The company smashed the Thomson Reuters estimate of a 6.3% October gain.
Wet Seal saw its sales in October drop -9.7%, distressingly far below the estimated drop of -1%. The company also lowered third-quarter EPS guidance from $0.05-$0.06 to $0.04. Shares are down more than -7% in the pre-market.