Retail Sales Strong in June
Americans continued their shopping spree in June, the sixth straight month of sales gains for many of the nation’s retailers, company reports showed Thursday, thanks to healthy economic times and a surging stock market.
Most merchants fared well in June, especially discount and some clothing stores, but there were exceptions. Several big chains, including Sears, Roebuck & Co., Kmart Corp. and J.C. Penney Co., were hurt by unseasonably cool weather and sagging demand for athletic shoes and sportswear. J.C. Penney said its weak sales would result in lower-than-expected earnings for the second quarter.
Cool, rainy weather in the Northeast and along the West Coast cut into some of June’s gains.
But the general trend was still upbeat.
In fact, many retailers are enjoying one of the best years in recent history. June’s sales gains followed especially strong results in April and May, when warmer-than-normal weather set off some early buying of everything from outdoor furniture to garden supplies to sundresses.
Encouraging Americans to shop this year is a healthy economy with low inflation and unemployment levels as well as high consumer confidence.
Separately Thursday, the government reported that the number of Americans filing new claims for unemployment benefits fell slightly last week although the impact of the General Motors strikes pushed the average number of claims for the last month to the highest level in more than two years.
The Labor Department said initial filings for unemployment benefits, after adjusting for normal seasonal variations, dipped 1,000 last week to 392,000.
With retailers continuing to report strong sales, analysts believe there will be profit growth in the second quarter, which ends in late July for most retailers.
“Retailers have lean inventories and haven’t marked down too much,” said Walter Loeb, who runs the retail consulting firm Loeb Associates. “If this continues, most retailers can anticipate a strong quarter and second half of the year.”
Penney’s slashed prices in an effort to move merchandise at its department stores. That cut into profit margins, and the retailer said its second-quarter earnings would fall below the 38 cents a share it earned a year ago. Analysts had expected 42 cents to 53 cents.
Penney said sales at its department stores open at least a year fell 2.1%, while total department-stores sales gained 2.2%. Overall results were boosted by the Eckerd drugstore division, where same-store sales rose 9.1%.
Wal-Mart, the nation’s largest retailer, said sales from stores open at least a year rose 9% from a year earlier. Total sales were up 17.4%.
Sears said its same-store sales rose 0.3%, while total sales gained 0.8%. Kmart’s same-store sales rose 1.5%, while total sales rose 0.5%.
Dayton Hudson Corp. said same-store sales rose 4.6% and total sales rose 10.4%. Same-store sales were strongest at its Target discount stores, where same-store sales rose 4.9% and total sales were up 12.1%.
