Retail

June Retail Sales Predicted Soft (COST, LTD, SKS, BKE, JWN, KSS, KORS, LULU, ZUMZ, FRAN, ANF, DSW, BBBY, BODY)

Retails sales for the month of June are expected to show only modest growth according to research firm Retail Metrics Inc. June is not a particularly good month for most retailers, and this year stores have to compare sales to June 2011 when the sales growth over June 2010 averaged a phenomenal 7.2%.

Costco Wholesale Corp. (NASDAQ: COST), for example is up against a 14% same-store sales rise in 2011. Limited Brands Inc. (NYSE: LTD) and Saks Inc. (NYSE: SKS) face comparable store growth of 12%, Buckle Inc. (NYSE: BKE) will be compared to 11% growth last year, Zumiez Inc. (NASDAQ: ZUMZ) goes against a 10% growth rate, Nordstrom Inc. (NYSE: JWN) jumped 8% last year, and Kohl’s Corp. (NYSE: KSS) grew 7.5% in June 2011.

Some retailers have projected big numbers for the second quarter, including June. Michael Kors Holdings Ltd. (NYSE: KORS) expects second quarter same-store sales to jump 35% and the company raised second quarter guidance. Lululemon Athletica Inc. (NASDAQ: LULU) and Francesca’s Holdings Corp. (NASDAQ: FRAN) are expecting low double-digit sales growth in the second quarter, while Zumiez expects growth of 8%-10%, mainly related to the acquisition of Blue Tomato stores.

Stores expecting less good news include Abercrombie & Fitch Co. (NYSE: ANF), which posted a -5% comparable store sales rate in the first quarter continues to close stores. DSW Inc. (NYSE: DSW) expects same store sales growth of 2%-4%, way below of growth in the past 10 quarters, while Bed, Bath & Beyond Inc. (NASDAQ: BBBY) posted growth of 3% for its second quarter, but missed EPS expectations. Body Central Corp. (NASDAQ: BODY) has said only that sales have been soft since April.

With consumer confidence weakening, job growth declining, and unemployment no better than stable, retailers could be in for a tough summer.

Paul Ausick