Retail Metrics is out with its preliminary targets on June same-store sales and the report is one of caution. The firm is now expecting only a 1.0% growth in the same-store sales, down from 1.1% a week ago. The firm is factoring out lost business from Walgreen Co. (NYSE: WAG) since it lost the Express Scripts (NASDAQ: ESRX) business and says that the total June same-store sales would be up by 2.4%.
As far as the real trend, the report shows that the final Saturday sales and traffic looked ‘somewhat soft’ ahead of July 4th promotions. Tropical Storm Debby may have also acted as a small drag at the very end of the month.
Kohl’s Corporation (NYSE: KSS) is expected to drag down the department store sector as the report today noted that it had inadequate inventory this spring. Its June s-s-s is now 90 basis points lower at -2.5% (negative) for the month. Retail Metrics noted that even Macy’s Inc. (NYSE: M) was brought down 10 basis points to 2.5% and there was a slight bump higher for Nordstrom Inc. (NYSE: JWN). Some specialty apparel shops are expected to grow more than expected, which included The TJX Companies, Inc. (NYSE: TJX) and Ross Stores Inc. (NASDAQ: ROSS).
We would note a few key issues which may act as a wild card. For starters gasoline prices at the pump are acting as less of a consumer drag now that many stations in the U.S. are selling gasoline for almost $3.00 per gallon again. Last year’s June was a high watermark, so the gains this month were already deemed to be ‘hard to hit’ long before. TS Debby was also not so widespread that it would have a significant impact despite power outages and localized floods.
JON C. OGG