September Retail Sales on Deck, Expected Winners & Losers (ZUMZ, ANF, GYMB, LULU, ANN, APP)

This week will mark some key retail sales data for the month of September-2010 in same-store-sales.  So far we are seeing some positive trends from many of the retailers and there are some expected to be losers as well.  Retail Metrics Inc. has sent us some key expectations for same-store-sales data for the September reports as well as some key overviews of trends to watch for.  As a result of what we have seen in the preliminary Retail Metrics report, we are tracking some key expectations listed for Zumiez, Inc. (NASDAQ: ZUMZ), Abercrombie & Fitch Co. (NYSE: ANF), Gymboree Corp. (NASDAQ: GYMB), lululemon Athletica Inc. (NASDAQ: LULU), AnnTaylor Stores Corp. (NYSE: ANN), and American Apparel, Inc. (AMEX: APP).

Zumiez, Inc. (NASDAQ: ZUMZ) is expected to be a winner with same store sales approaching +12.4%, although we already were told about a strong quarter by the company.  Even Abercrombie & Fitch (NYSE: ANF) is expected to show a recovery with gains of 3.6%.  Gymboree (NASDAQ: GYMB) finds itself in an interesting place as it has reportedly now hired Goldman Sachs to explore a sale of the company, but its expected same-store sales in September are expected to be slightly in the red at -0.8%.

As far as which companies are expected to have the largest upward revisions, lululemon Athletica (NASDAQ: LULU) is expected to be the winner with double-digit gains for the quarter.  AnnTaylor Stores Corp. (NYSE: ANN) is expected to come in at the higher-half of its 3% to 9% guidance at 7.3% gains led by its flagship Ann Taylor Stores over the Ann Taylor Loft stores.  The dud is expected to be the troubled American Apparel (AMEX: APP) with a drop of -10% or so.

Retail Metrics noted that teen apparel chains in this back-to-school season were far more promotional and started sales earlier than they had in some time.  The group feels that this helped to drive traffic in August for an upside surprise in that month while sales and traffic in the first half of the month were solid but began to drop off as back to school sales ended.

If you want to know where the continued gains seem to be falling, Retail Metrics noted that the discounter segment ex-WalMart was the leader with an expected gain of 3.7% for Septemner 2010.

The research gives a list of positive catalysts.  September had the best stock market gains in over 70 years, late Labor Day pulled sales into September along with a later back to school season, promotional sales picked up, car sales picked up, Fall Fashion generally looks good, August income and spending rose, select stores talked up sales and many beat estimates.  There were some negative items prevailing as well.  For starters, unepmloyment remains very high, consumer confidence fell, housing remains weak, weather may have been a drag on sales, and credit remains tight.

Most of the retail data will be out by Wednesday and Thursday of this week and it could act as a catalyst for the overall sector.

JON C. OGG