U.S. Apparel Retailers Mostly Report Lower September Sales

(RTTNews) - A sampling of U.S. apparel retailers on Thursday mostly reported lower sales at established stores for the month of September.

Sales during the month were impacted by unseasonably warm weather that delayed purchases of fall apparel and also reflected lackluster back-to-school spending.

September is a transition month, marking the end of the back-to-school shopping, which is a necessity, and ahead of the all-important holiday season. The back-to-school season is the second-biggest selling period for retailers after the Christmas holiday season.

According to the National Retail Federation's annual back-to-school survey, parents of K-12 and college students plan to spend a record $75.8 billion this summer, representing an increase of 11.5 percent over 2015.

In late September, data showed that consumer confidence in the U.S. unexpectedly improved in the month of September to its highest level since the recession. The Conference Board said its consumer confidence index jumped to 104.1 in September from an upwardly revised 101.8 in August.

Sales at established stores or comparable-store sales is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.

L Brands, Inc. (LB), the operator of Victoria's Secret and Bath & Body Works chains, said its September comparable store sales increased 3 percent, reflecting strength in its Bath & Body Works brand. This compared to an increase of 8 percent in the year-ago period.

Net sales for the month were $971.4 million, up 6 percent from $919.9 million last year.

However, the company noted that the September merchandise margin rate was down significantly to last year and below expectations.

Looking ahead, L Brands said it expects same-store sales for the month of October to be up low single digits.

Teen apparel retailer Buckle, Inc. (BKE) said that its comparable store net sales for the month of September decreased 15.5 percent. Net sales for the month declined 14.8 percent to $82.9 million from last year's $97.4 million.

Within the men's and women's categories combined, Buckle's accessory sales for the month were down about 18 percent compared to the same period last year, while footwear sales declined about 20.5 percent. These two categories accounted for approximately 8.5 percent and 6.5 percent, respectively, of the latest month's net sales.

Value-priced fashion apparel retailer Cato Corp. (CATO) reported that its September same-store sales declined 9 percent, while total sales decreased 8 percent from last year to $76.2 million.

John Cato, chairman, president, and chief executive officer said, "September same-store sales were well below our expectations."

Looking ahead, Cato now expects third-quarter earnings in a range of $0.07 to $0.11 per share, compared to $0.30 per share last year, and down from the company's previous guidance of $0.13 to $0.18 per share.

The company noted that the decrease in third-quarter earnings due to lower sales will be offset by favorable adjustments to the effective tax rate as a result of continuing tax initiatives.