By Lindsey Rupp
and Matt Townsend
L Brands Inc., which owns Victoria’s Secret and has powered through a choppy economy, reported August same-store sales that narrowly missed estimates, the latest evidence of weakness among apparel chains.
Sales at L Brands stores open at least 12 months rose 2 percent, compared with a predicted gain of 2.1 percent. Teen chain The Buckle Inc. posted an increase of 1 percent, just surpassing analysts’ estimates for a gain of 0.6 percent.
The results come after retailers from Macy’s to Walmart missed second-quarter sales estimates and cut forecasts. Retailers also had a sluggish start to the back-to-school shopping season in July. The chains who reported August sales on Thursday have done little to buck that trend, which may continue into the holiday shopping season, the largest spending period of the year.
“Back-to-school so far is anemic at best,” said Adrienne Tennant, an analyst at Janney Montgomery Scott LLC, in a conference call with clients. “That usually has had a high correlation with holiday” sales.
By contrast, the U.S. auto sector posted August sales results that exceeded already rosy estimates, with a total surpassing any month in more than six years and the fastest sales rate since 2007. Many Americans are also spending on home-related products, lifting sales for both Home Depot and Lowe’s.
August same-store sales for the more than 10 companies tracked by analyst Retail Metrics rose 3.8 percent. While that surpassed analysts’ projections for a gain of 3.2 percent, the results were bolstered by a strong showing by Costco Wholesale and Walgreen.
A year ago, shoppers helped push retailers to a same-store sales gain of 5.9 percent. Back then 20 companies reported. Since then, half have dropped out, saying they would rather focus on quarterly rather than monthly results. This year, U.S. households were forecast to shell out an average of 7.8 percent less.