Retail

June Retail Sales Growth Forecast at 18-Month High

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If the forecast for retail sales growth is accurate, U.S. retail same-store sales will rise 4.9% in June, marking the largest monthly gain since January 2013. Including comparable store sales already reported from drug stores, June’s same-store sales are projected to rise 5.2%. Stores are scheduled to report same-store sales Thursday morning.

In June of 2013, same-store sales rose 4.3%, not including drug stores, and 4.9% including them.

The forecast data comes from research firm Retail Metrics, which cites positive factors like a 0.2% drop in the U.S. unemployment rate, higher store traffic levels and all-time stock market highs among other things leading to the encouraging forecast. Weighing in against a boost in sales are still-high gasoline prices, low labor force participation and difficulties that still challenge low- and middle-income consumers.

Retail Metrics forecasts a same-store sales gain for Gap Inc. (NYSE: GPS) of 0.7%, sharply lower than last year’s June sales growth of 7%.

Costco Wholesale Corp. (NASDAQ: COST) is expected to post a gain of 5% on top of a 6% gain in June of 2013.

Buckle Inc. (NYSE: BKE) is one of just two retailers expected to post a same-store sales decline. Retail Metrics pegs the drop at 0.5%, compared with a gain of 3.4% in June a year ago.

L Brands Inc. (NYSE: LB), parent of Victoria’s Secret and Bath & Body Works, is forecast to post a same-store sales gain of 2.7%, compared with flat sales in June of 2013.

Among stores that no longer report monthly sales, Retail Metrics estimates that second-quarter same-store sales will decline 7.8% at American Eagle Outfitters Inc. (NYSE: AEO), 4.4% at Abercrombie & Fitch Inc. (NYSE: ANF) and 9.9% at Aeropostale Inc. (NYSE: ARO). Last year American Eagle posted a same-store sales decline of 7% in June, while Abercrombie posted a drop of 10% and Aeropostale sales dropped 15%.

Wal-Mart Stores Inc. (NYSE: WMT), which has not posted a same-store sales gain in five consecutive quarters, is expected to post a 0.2% same-store sales gain in the second-quarter.

As Retail Metrics notes, “Six years into the recovery the vast majority of middle and lower income consumers are still not seeing salary or wage gains sufficient to generate higher spending levels on discretionary items.”

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