Teen stores Buckle and Zumiez battered expectations, while Gap and Wet Seal both missed expectations badly.

Data from CNBC.

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.

Paul Ausick

We have September same-store sales from Target Corp. (NYSE: TGT, Macy’s Inc. (NYSE: M), Nordstrom Inc. (NYSE: JWN), J.C. Penney Co. (NYSE: JCP), Dillard’s Inc. (NYSE: DDS), Limited Brands Inc. (NYSE: LTD), Gap Inc. (NYSE: GPS), Stage Stores Inc. (NYSE: SSI), Zumiez Inc. (NASDAQ: ZUMZ), and The Buckle, Inc. (NYSE: BKE).

Target reported September same-store sales up 5.3%, and total sales up 6.5% from September 2010. Analysts were expecting growth of 3.9%. For the year-to-date, same-store sales at Target are up 3.4% year-over-year, compared with a 2.1% year-to-date rise in 2010 over 2009.

Macy’s posted a jump of 4.9% in September same-store sales, and an overall increase of 5.3%. Analysts were expecting a same-store sales increase of 4.4%. The company’s CEO is buoyant, ” We are feeling quite confident that we will continue to gain market share as we head toward the holiday selling season.” Year-to-date, same-store sales are up 5.6% and total sales are up 6.1%. Macy’s also said it expects both third- and fourth-quarter sales to be at the high end of the 4%-4.5% guidance the company has already issued.

Nordstrom reported a jump of 10.7% in September same-store sales and a total sales increase of 16.3%. Analysts had been expecting a same-store increase of 5.2%

J.C. Penney was among those that missed estimates. The company reported that same-store sales in September were down -0.6% and total sales were off an even worse -3.6%. Analysts had been expecting a same-store increase of 0.6% for the month. The store noted that sales of children’s apparel were among its better performing divisions, no surprise given the back-to-school shopping season.

Dillard’s posted a 4% rise in same-store sales for September, and a total sales increase of 3%. Analysts had been expecting a same-store boost of 3.3%. On a regional basis, the store said that sales were at the average company trend for the midwest, slightly below trend in the east, and below trend for the west. That doesn’t sound like upbeat forecast for the holiday season.

Limited stores posted an 11% jump in September same-store sales, more than double the expected rise of 4.6%. Total sales for the month rose 11% as well, and year-to-date sales are up nearly 12%.

Gap was another store that recorded a drop in same-store sales. The decrease came in a -4%, worse than expectations of -3.8%. International sales were hit the hardest, down -13% year-over-year.

Stage Stores also showed a decline in September same-store sales. The drop totaled -0.7% versus an expected gain of 0.3%.

Zumiez blasted through expectations of a 3.2% increase in same-store sales, posting a gain of 10.1%. The company raised its guidance for third-quarter sales and now expects EPS to rise from $0.37-$0.39 to $0.40-$0.41.

The Buckle posted a September same-store sales gain of 10.3%, far better than expectations of 3.8%. Total sales rose 13% year-over-year, and year-to-date same-store sales are up 8.7%.

The only retailer expected to see a double-digit rise in same-store sales for the month was Costco Wholesale Corp. (NASDAQ: COST), and it didn’t disappoint, posting a 12% gain. But Nordstrom, Limited, Zumiez, and Buckle were all big positive surprises with their double-digit sales growth. J.C. Penney, Gap, and Stage Stores continue to struggle.

If there’s a signal here for the coming holiday season, it’s that maybe the US economy isn’t as bad as all the other signals indicate. Or it could be that consumers spent money on needed school clothes and supplies, but are not going to be such free spenders later this year.

Paul Ausick

Costco led the pack, reporting an August same-store sales gain of 11%, including sales in its joint venture in Mexico. Analysts had been expecting a gain of 9.3%. Excluding gasoline sales and the effects of currency exchanges, sales rose 7% in August. Costco also announced that its CEO would step down effective January 1st and be replaced by the company’s current president and COO.

Target’s same-store sales rose 4.1% in August, beating a consensus estimate of 3.5%. The company said that back-to-school and back-to-college sales were in line with expectations. Total sales rose 5.4% in the month.

Macy’s posted a year-over-year gain in August of 5%, beating expectations of a 4.5% increase. The company also noted that it would have added an additional 1.5% in sales if not for store closings and lower customer traffic due to the hurricane.

Saks posted a gain of 6.1% in same-store sales, lower than an expected rise of 7%. Like Macy’s, the company said the effects of Hurricane Irene lowered sales by 1.5%.

Nordstrom’s same-store sales rose 6.7% compared with the same period last year. Analysts were expecting a gain of 4.8%.

J.C. Penney reported a -1.9% drop in same-store sales in August and a total sales drop of -4.5%. Penney’s also blamed Hurricane Irene for poor sales in the last week of August.

Kohl’s also reported a same-store sales drop of -1.9% for the month. Analysts were expecting an increase of 1.6%. The company said that customer traffic was lower in August. It’s counting on new Jennifer Lopez and Marc Anthony brands for a pick-up for the rest of this year. Perhaps the company missed the news of the couple’s pending split.

Gap stores reported same-store sales down by -6% in August, worse even than expectations of a -3.8% drop. Deep discounts and higher production costs have been plaguing the company.

The Wet Seal posted an same-stores sales increase of 5.5%, higher than the consensus expectation of 4.2%. The company also noted higher margins on its back-to-school offerings.

The Buckle, another teen-oriented retailer, posted a jump of 8.3% in same-store sales in the month of August. Analysts were expecting a rise of 4.5%. Total sales for the company rose 11.9%.

Zumiez reported same-store sales growth of 4.3% for August, just missing expectations. But the company reported second quarter earnings at the same time the beat consensus estimates. Unfortunately the company lowered its forecast for the third quarter, and that is hurting the stock in the first hour of trading this morning.

Zumiez’s shares are off nearly -2%, at $18.15, in a 52-week range of $15.00-$33.13. Other losers this morning include Gap stores, off -3% at $16.01, in a 52-week range of $15.26-$23.73, and J.C. Penney, down about -1.5%, at $26.24 in a 52-week range of $20.20-$41.00.

Costco shares are up almost 2%, at $80.05 in a 52-week range of $57.65-$83.95. Macy’s stock is up more than 2.5%, to $26.63 in a 52-week range of $19.66-$30.62. The SPDR S&P Retail ETF (NYSE: XRT) is down about -0.4%, at $49.39 in a 52-week range of $37.49-$56.44. The Retail HOLDRs (NYSE: RTH) is up about 0.15%, to $104.34, in a 52-week range of $89.99-$114.38.

Paul Ausick

Drug store forecasts are down 20 basis-points to 2.7% due to Walgreen Co. (NYSE: WAG).  Retail Metrics sees slightly higher expectations for Limited Brands, Inc. (NYSE: LTD), The TJX Companies, Inc. (NYSE: TJX), and even for Ross Stores Inc. (NASDAQ: ROST).  Gap Inc. (NYSE: GPS) comparable projections moved lower.  Expectations for Hot Topic moved up helping the teen group tick higher.

Retail Metrics did highlight some of the extreme gains expected, in order, as follows: Lululemon Athletica Inc. (NASDAQ: LULU) at +16.5%, PriceSmart Inc. (NASDAQ: PSMT) at +16.0%, Body Central Corp. (NASDAQ: BODY) at +11.8%, Buckle Inc. (NYSE: BKE) at 11.0%, Chico’s FAS Inc. (NYSE: CHS) at +10.4%, and Tiffany & Co. (NYSE: TIF) at +10.2%.  These expected gains are not helping many of these stocks on Tuesday, but double-digit same-store sales growth is likely going to be more than impressive in this environment.  We noted a drop expected in Gap Inc. (NYSE: GPS) and that is now expected to come in at -0.8% in same-store sales growth.

What is driving the gains despite a slowing economy? Traffic levels at stores have remained solid, higher-end retailers are faring better, 4th of July weekend was a good start for the month, hot weather favored mall traffic, gas prices are down, and more.  Higher unemployment, weaker consumer confidence, apparel price hikes, and weaker housing data are all potential drags per the Retail Metrics data.

Many retail same-store sales do sometimes come out much different than expected and the reasons can literally be from a discrepancy of one day’s reporting.  It is good to see that growth is still being seen somewhere, and more important is that the growth is expected to remain in place despite weak data being seen on most other fronts.

As a reminder, these figures will set the tone for the retail earnings reports that will kick off in the next two weeks as retailers have a one-month lag compared to most other companies in reporting earnings.

JON C. OGG

Boyd Gaming Corp. (NYSE: BYD) Reiterated Outperform at Credit Suisse.
The Buckle Inc. (NYSE: BKE) Raised to Hold at S&P Equity Research (late-Thursday call).
Canadian Solar, Inc. (NASDAQ: CSIQ) Maintained Buy with $20 target at Auriga.
Clean Energy Fuels Corp. (NASDAQ: CLNE) Maintained Neutral, lowered estimates, but Raised target to $15 at BofA/ML.
Energy Conversion Devices, Inc. (NASDAQ: ENER) maintained Neutral but target cut to $2.50 at Credit Suisse.
Evergreen Solar Inc. (NASDAQ: ESLR) Cut to Underweight at JPMorgan.
Hansen Natural Corporation (NASDAQ: HANS) Cut to Neutral at Goldman Sachs.
Ingram Micro Inc. (NYSE: IM) Raised to Buy at S&P Equity Research (late-Thursday call).
J.C. Penney Co., Inc. (NYSE: JCP) named Bull of the Day at Zacks Investment Research.
Mobile Telesystems (NYSE: MBT) Raised to Outperform at Credit Suisse.
Protective Life Corp. (NYSE: PL) Raised to Neutral at BofA/ML.
Unisys Corporation (NYSE: UIS) Raised to Hold at S&P Equity Research (late-Thursday call).
Valero Energy Corporation (NYSE: VLO) Reiterated Outperform and target raised to $41 at Credit Suisse.

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JON C. OGG

Among department stores, Macy’s Inc. (NYSE: M) gained 4.3%, also higher than an expected 4% increase. J.C. Penney Co. Inc. (NYSE: JCP) gained 2.3%, better than the expected 1.6% increase. Kohl’s Corp. (NYSE: KSS) same-store sales rose 4.5%, substantially higher than the expected 2.6% increase.

Apparel retailers were somewhat more mixed. Nordstrom Inc. (NYSE: JWN) saw sales rise 6.3%, against expectations of 5.9%. Limited Brands Inc. (NYSE: LTD) sales jumped 10%, significantly above expectations of 7.3%. Gap Inc. (NYSE: GPS) same-store sales were flat, which was better than the expected -0.2% decline. Abercrombie & Fitch (NYSE: ANF) sales rose 6%, compared with expectations of 5.9%, while same-store sales at Aeropostale Inc. (NYSE: ARO) fell -1%, compared with an expectation of a 1.2% gain.

Buckle, Inc. (NYSE:BKE) same-store sales fell -3.5%, which would not be good except that analysts had been expecting a drop of -6.5%. Hot Topic, Inc. (NASDAQ:HOTT) posted a drop in sales of -3.7%, significantly better than the expected decline of -6.2%. Another teen apparel retailer, Zumiez Inc. (NASDAQ:ZUMZ) posted a rise of 9.1%, much better than the expected 7.7% growth.

Wary consumers could be waiting for sale prices to begin showing up, or they could be just trying to make do. The sales increases at the discounters, especially Family Dollar stores, indicate that low prices are attracting more customers.

The important point about all this is that last year’s August sales were so lousy that any improvement looks huge. US shoppers are not convinced yet that it’s safe to shop again. And who can blame them?

Paul Ausick

We have compiled data and analysis here using Thomson Reuters consensus estimates, recent metrics offered by the companies, relative performance, and more.  As with what we have seen at most retail and apparel earnings this week and last, many of these are richly valued and probably cannot just hope to please the bulls by meeting estimates on cost cutting and inventory management and then giving cautious guidance.

Dick’s Sporting Goods Inc. (NYSE: DKS) estimates are $0.09 EPS and $961.5 million, both higher than last week’s estimates; estimates for the holiday quarter are $0.57 EPS and $1.27 billion in revenues, both also higher than last week.  With shares at $24.60, its 52-week trading range is $9.21 to $26.00.  A look at forward annual earnings estimates of $1.13 EPS for Jan-2010 and $1.29 for Jan-2011 will bring up some of the same valuation concerns we have seen elsewhere in retail.

Foot Locker Inc. (NYSE: FL) estimates are $0.13 EPS on $1.19 billion in revenues.  For the holiday quarter ahead estimates are $0.28 EPS and $1.29 billion in revenues.  The stock is probably not overly expensive at $11 at almost 18-times the $0.60 EPS target for FY Jan-2010 and 14.5-times the $0.73 EPS target for FY Jan-2011.  They are not exactly cheap either.  The 52-week trading range is $3.65 to $12.95.

Gap Inc. (NYSE: GPS) is in a totally new light as the new CEO has really gotten this longstanding turnaround candidate turned around and heading in the right direction.  Things are good enough and not-bad enough that we aren’t calling Old Navy a dead brand thanks to the new efforts.  Estimates are $0.44 EPS and $3.57 billion in revenues.  Next quarter estimates are $0.43 EPS and $4.15 billion in revenues.  The CEO deserves praise, but the question here is one of how to value Gap shares in looking ahead now that it is mature, has managed to get much of a turnaround under its belt considering the economy and peers, and since it is no longer the great growth story it once was.  Estimates are $1.50 EPS for FY Jan-2010 and $1.65 EPS for FY Jan-2011.  With a $22.20 price, Gap trades at 14.8-times this year’s earnings and trades at 13.5-times next year’s expected earnings.  That is not expensive in the current climate, particularly when you consider that it has provided an upside surprise for the last four quarters.  We don’t expect it to come any time soon, but we have always had Gap as a break-up candidate where it could break the three major brands apart.  The company also noted how October same-store sales were up 4% and the total sales rose 5% after seeing gains over at Banana Republic and Old Navy.  The Gap brand continues to drag the ship now.

Ross Stores, Inc. (NASDAQ: ROST) $0.84 EPS and $1.73 billion in revenues.  For the holiday quarter those estimates are $0.99 EPS and $1.92 billion in revenues.  With shares at $45.65 and with a 52-week trading range of $21.70 to $50.50, this doesn’t sound that expensive or like it has to blow numbers away to keep the bulls happy.  The off-price and home accessories retailer trades at 13.5-times expected Jan-2010 earnings estimates of $3.37 EPS and 12.5-times the expected Jan-2011 earnings estimates of $3.67 EPS.

The Buckle (NYSE: BKE) estimates are $0.70 EPS and $231.07 million in revenues; and estimates are $0.81 EPS and $269.94 million in revenues.  At $28.96, the retailer of casual apparel, footwear, and accessories for young men and women has a 52-week range of $13.57 to $39.09 and it trades at 11-times both the Jan-2010 estimates of $2.62 and Jan-2011 estimates of $2.63.  That sounds cheap, but the lack of growth is probably part of the reason when you consider about 6% top-line revenue growth from fiscal years Jan-2010 to Jan-2011.

Sears Holdings Corporation (NASDAQ: SHLD) estimates are -$1.09 EPS on $9.92 billion in revenues.  For the ever-important holiday quarter the estimates are $2.64 EPS and $12.61 billion in revenues.  This has a huge premium close to 70-times this year’s expected earnings and about 50-times FY Jan-2011 estimates.  The premium is due to the old belief of the value of the dirt underneath the shops and because of brands and trademarks which can be sold or licensed.  At $76.00, the 52-week trading range is $26.80 to $79.35.  Calling the history here spotty is an understatement, yet shares continue to rally after selling off on bad news.

The Children’s Place Retail Stores, Inc. (NASDAQ: PLCE) still has a discrepancy from source to source on its earnings estimates so that is about all we will add: $1.38 EPS on $461.18 million in revenues; next quarter estimates are $1.05 EPS on $463.78 million in revenues. The largest unquantifiable risk here is what happens in flu season and how protective Mommy is over Junior. With shares around $34.65, and the 52-week trading range is $16.45 to $37.68.

Wet Seal Inc. (NASDAQ: WTSLA) is a young women’s apparel retailer.  Normally, we might not cover this one, but it is a retailer that has been very range-bound because of a turnaround and because of its mixed performance metrics.  Estimates are $0.03 EPS and $139.79 million in revenues for the past quarter, yet the coming holiday quarter-end estimates are $0.08 EPS and $155.19 million in revenues, yet the company gave guidance of $0.04.  We will hold off on forward valuation multiples because each penny in an EPS scenario for a $3.36 stock will skew the ratios.  October same-store sales were down 1.3%.

Williams-Sonoma Inc. (NYSE: WSM) is not just in the apparel market, but steadfast in the retail market for middle and upper-middle class spending for the kitchen and house. Its estimates are $0.05 EPS and $686.1 million in revenues. For the important Christmas quarter the estimates are much higher at $0.38 EPS and $949.9 million in revenues.  At $20.66 and with a $4.35 to $22.25 52-week trading range, this company absolutely has to knock the cover off the ball here.  Otherwise, this trades at 62-times Jan-2010 fiscal estimates and 38-times Jan-2011 fiscal earnings estimates.  Meeting estimates and maintaining guidance won’t likely be enough here.

Zumiez, Inc. (NASDAQ: ZUMZ) is the last of the retailers out on Thursday Estimates for the action sports equipment and apparel retailer are $0.15 EPS and $112.01 million in revenues for the last quarter, which is higher than estimates last week.  For the important holiday quarter-end ahead the estimates are $0.25 EPS and $131.17 million in revenues, also higher than last week. Unfortunately, its same store sales in October were off by -8.9% and that may erase its habit of beating estimates.

JON C. OGG
NOVEMBER 17, 2009

American Express (AXP) Started as Underperform at RBC.
Buckle (BKE) Cut to Underweight at KeyBanc.
Ciena (CIEN) Cut to Underperform at JMP Securities.
Energy Conversion Devices (ENER) Cut to Hold at Citi; Cut to Neutral at Credit Suisse.
International Paper (IP) Cut to Hold at Deutsche Bank.
Liberty Media (LINTA) Cut to Sell at Citi.
Royal Bank of Scotland (RBS) Cut to Underperform at Credit Suisse.
StatoilHydro (STO) Cut to Hold at Societe Generale.
Taiwan Semiconductor (TSM) Cut To Market Perform at FBR.
Temple-Inland (TIN) Cut to Hold at Deutsche Bank.
ViaSat (VSAT) Cut to Hold at Collins Stewart.

JON C. OGG

Fred’s Inc. (NASDAQ: FRED) said that its same-store sales were up by +1.9% based on increased bargain shoppers.  No volume or trading indications have been seen yet, but there is still a while before the open.

Gymboree Corp. (NASDAQ: GYMB) said it saw a mid-teens percentage drop, but this is much better, or less-bad, than the 20% to 25% drop it was expecting.  The company raised its earnings guidance to $0.50 to $50.56 EPS rather than a prior forecast of $0.18 to $0.25 EPS.  The company attributed product reception and promotional campaigns as contributing to margins.  Its shares are up over 16% and flirting with the $25.00 mark this morning.

Hot Topic (NASDAQ: HOTT) is continuing to win from its ‘Twilight’ ties with a gain of +7.1% n same store sales.  The company now expects to earn money with $0.01 to $0.02 EPS rather than a loss to gain of -$0.01 to $0.01 EPS.  Shares are up over 3% to north of $12.00.

J.C. Penney Company (NYSE: JCP) posted a drop of 7.2% in same-store sales.  While this is a big drop, it is less than elsewhere and less than estimates of double-digit drops.  The loss of the quarter is now seen at -$0.05 to -$0.10 rather than a loss of -$0.20 to -$0.20.  Shares are up 5% at $23.80.

The TJX Companies Inc. (NYSE: TJX) said its same-store sales rose 2% rather than an expected drop of about 2% seen by analysts.  Its total sales remained flat at $1.7 billion, but the discount seller now sees earnings at the high end or slightly above its previous forecasts of $0.32 to $0.38 EPS.  Shares are now up over 4% at $27.85.

JON C. OGG