Merchants get punished in July

Retailers suffered their second-worst monthly sales in July, a crucial month for sellers since it also starts the back-to-school shopping period.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Parija B. Kavilanz, senior writer

NEW YORK ( -- Merchants suffered their second-worst monthly sales of the year in July -- a trend that could signal that the back-to-school shopping season, the second-biggest selling period of the year, will be much weaker than expected.

Several of the nation's leading retail chains -- including mall-based specialty sellers, teen clothing chains, department store chains and even discounters -- suffered declining same-store sales last month as consumers continue to shun non-essential discretionary purchases.

Same-store sales -- an important gauge of a retailer's performance -- measure sales at stores open at least a year.

Sales tracker Thomson Reuters, which tracks monthly same-store sales for 30 chains such as Target (TGT, Fortune 500), Gap (GPS, Fortune 500) and J.C. Penney (JCP, Fortune 500) said overall July sales for the group fell 5.1%, compared to a gain of 1.1% last July.

July's slump marked the 11th consecutive month of same-store sales declines. The firm said more than half of the retailers it tracks missed their sales estimates for the month.

Last month's result was also the second worst monthly performance of the year following January's monthly same-store sales decline of 5.7%.

Cooler-than-expected weather in July combined with more parents waiting to commence their school-related shopping in August when the tax-free shopping events take place hurt sales volumes last month, said Jharonne Martis, senior research analyst with Thomson Reuters.

Among the misses, discounter Target (TGT, Fortune 500)'s sales fell 6.5% versus analysts' expectations for a 5.8% decline. Macy's (M, Fortune 500) sales slumped 10.7%, worse than analysts' forecasts for a 9.1% decline, while sales at J.C. Penney fell 12.3%, slightly better than the company's guidance for sales to decrease 13% to 16%.

Elsewhere, apparel seller Gap Inc. reported an 8% drop in its same-store sales last month while sales at teen clothier Abercrombie & Fitch tumbled 28%.

However, mid-priced department store chain Kohl's barely escaped the downdraft, posting a slight 0.4% sales increase in July, while high-end chain Nordstrom reported a 6.9% dip in its same-store sales, better than analysts' forecast for a 11.1% decline.

Martis said Wal-Mart (WMT, Fortune 500), the world's biggest retailer, likely stole sales away from many of its peers because of its value prices that continue to attract more shoppers from all income levels into its stores.

Wal-Mart no longer reports monthly same-store sales. However, the retailer is expected to report a 1.1% gain in its quarterly same-store sales when it reports its quarterly results next week. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
These 10 food trends could dominate 2015 So long, kale. Here's what's expected to shake up the food industry next year. More
Beyond Russia: Geopolitical hot spots in 2015 Investors beware: These 5 global crises are likely to rattle the stock market and world economy. More
These 20 antique guns could fetch big bucks Morphy Auctions in Pennsylvania is putting nearly 1,000 old guns on the block. Here are just a few. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.