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Retail sales gains slow
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July 9, 1998: 1:05 p.m. ET
Specialty chains led pack in June as mass merchants felt brunt of slowdown
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NEW YORK (CNNfn) - As a further sign of the slower economic growth during the second quarter, U.S. consumers handed department store chains and specialty retailers a basket of disappointing sales for the month of June.
"I think consumers rested a little in June after spending their hearts out in April and May," said Todd Slater, retail analyst at Lazard Freres.
According to Lazard Freres' Retail Comparable-Store index of 49 companies, same-store sales -- from units open during the same period a year earlier -- gained only 6.2 percent in June following April and May increases of 13.1 percent and 8.3 percent, respectively.
"It's not unusual to see a slowdown in a month following that kind of robust sales growth," Slater said.
Much of the sluggish growth was attributed to the relatively poor results at the nation's largest department stores. Indeed, J.C. Penney Co. (JCP) cited the slower-than-expected sales in June as a primary reason the company will miss its earnings mark in the quarter.
But Slater said the flat results of big retailers like Kmart (KM) and Dayton Hudson Corp. (DH) and department stores such as Sears Roebuck & Co. (S) weren't characteristic of the entire group.
Specialty retailer AnnTaylor Stores Corp. reported same-store sales gains of 9 percent, sending the once-lagging stock (ANN) up 1-7/8 to 23-3/16.
"Specialties are doing well. Big department stores and mass merchants took it on the chin this month. But the specialty retailer did a very good job attracting people for the month," Slater said.
Purveyors of hard goods continued to outperform apparel and accessories retailers. Bombay Co. (BBA) reported a 32 percent surge in same-store sales last month. Pier 1 Imports Inc. (PIR) said comparable-store sales rose 7.1 percent.
Even much-maligned Musicland Stores Corp. (MLG), which operates Sam Goody's music outlets, apparently was well on its way to turning around the operations. The company reported sales rose 5.8 percent.
Still, with the exception of AnnTaylor, upbeat June sales results weren't enough to trigger bullish investment sentiment. Shares of Gymboree Corp. (GYMB), which recorded a 65 percent jump, were off 27/32 at 15-11/32.
Among the other losers, Gap Inc. (GPS), which reported a 15 percent gain, was down 1-3/4 at 64-1/4. Talbots Inc. (TLB), which posted a 7.4 percent increase, lost 7/16 to 26-1/16.
-- by staff writer Robert Liu
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