August saw wild swings in the stock market and sinking consumer confidence. Not to mention Hurricane Irene, which left parts of the Northeast underwater and without power. But several of the nation's retailers still managed to report positive sales for the month of August, a key month for back-to-school shopping.
Macy's , Target , Wet Seal, Nordstrom and Saks were among the retailers reporting single-digit increases in sales at stores open at least a year. But JCPenney, Kohl's, Gap, Banana Republic and Old Navy reported single-digit decreases in same-store sales.
"August sales results came in somewhat mixed, but in general they were better than expected in light of the negative economic headlines early in the month and the impact of Hurricane Irene on the East Coast later in the month," said Randal Konik, an analyst with Jefferies & Co. "Teen retail results were good, and we expect momentum to continue into September. We also believe there could be some pent-up demand in September following August's missed hurricane sales."
Terry Lundgren, Macy's chairman-CEO, said that same-store sales, which rose 5% would have been 1.5% higher without Hurricane Irene. "We are very pleased with our August sales results, especially considering that more than 100 of our stores, including some of the largest-volume locations in our company, were closed for all or part of Saturday on a very important shopping weekend because of Hurricane Irene," he said. "Sales on Sunday, the first day of the September reporting period, also were impacted by about 130 hurricane-related store closings."
The impact of Hurricane Irene will be split between August and September. The last day of the August period was Saturday , meaning store closures on Sunday and into this week will be included in September reporting. That's led some analysts to caution that September sales could be lower than expected, especially as higher inventory levels and delayed purchases could lead to a more promotional month.
"Many customers are likely postponing their back-to-school shopping to next weekend, Labor Day weekend, which under normal circumstances is a more promotional weekend than August weekends," wrote Richard Jaffe, an analyst with Stifel Nicolaus, in a research note earlier this week. "However, with an expected inventory buildup this year due to the storm, we believe Labor Day weekend will be even more promotional than usual, likely negatively impacting September margins."
Indeed, Kevin Mansell, Kohl's chairman-CEO, said the retailer will be ramping up marketing to pull people into stores this fall. Kohl's reported a 2% drop in same-store sales. "Our August [same-store] sales results were mainly driven by lower customer traffic," he said. "We are aggressively increasing our marketing as well as sharpening our pricing focus for the remainder of the fall season to reverse this trend."
The National Retail Federation has predicted back-to-school sales will be flat this year, with many families delaying shopping until late in the season. Back-to-school and back-to-college spending is expected to top $68.8 billion this year. Spending per family with children in grades K-12 will average $603.63, down slightly from last year's average of $606.40. Back-to-college spending will average $808.71, down from $835.73 last year.