Customers leave a Target store with a cart full of merchandise in Chicago in 2007.Scott Olson/Getty Images
Shoppers remained resilient in August despite wild stock market swings and worries about the economy, resulting in what's winding up to be a respectable back-to-school shopping season for many merchants.
However, the impact of Hurricane Irene, which plowed through the Carolinas and up the Eastern Seaboard last weekend, hurt business for merchants, particularly clothing retailers. Retailers are still hoping to recoup lost sales in the next few weeks.
As retailers report their sales results Thursday, Target Corp. , Limited Brands Inc. , and teen retailer Wet Seal Inc. posted sales gains that beat Wall Street expectations. But there were several stragglers. Gap Inc. posted a bigger-than-expected drop. Kohl's Corp. and J.C. Penney Co. reported unexpected declines.
The results measuring sales at stores open at least a year are considered a key indicator of a retailer's health.
"Retailers weathered a number of storms to turn into what's expected to be a solid back-to-school and August selling season," said Ken Perkins, president of Research Limited LLC. "September will be interesting. The first half should be good but the second half could be sluggish." He said beyond buying clothing and supplies for their children, families don't have any "driving reason to spend."
"If the economy continues to teeter, the vast majority will keep their wallets tight," he added.
Target's revenue at stores open at least a year climbed 4.1 per cent in August, driven by back-to-school and back-to-college shopping. The results topped Wall Street's forecast.
Analysts polled by Thomson Reuters predicted a 3.5 per cent increase.
Macy's Inc. had a 5 per cent gain in revenue at stores opened at least a year. Analysts were expected a 4.5 per cent increase.
But J.C. Penney had a 1.9 per cent decline, below the 0.8 per cent increase that analysts were expecting. Kohl's also posted a 1.9 per cent decline, below the 1.6 per cent increase that Wall Street expected.
Teen retailer Wet Seal Inc. posted a 5.5 per cent increase, beating analysts' estimates for 4.2 per cent. The results were driven by a 7.3 per cent increase at the company's 461 namesake stores. The smaller Arden B division, which has 84 stores, had an 8.7 per cent decline.
On Wednesday, Costco Wholesale Corp. reported that its revenue from stores open at least a year climbed 11 per cent in August, beating Wall Street's expectations. Analysts surveyed by Thomson Reuters predicted the figure would rise 9.3 per cent for the warehouse club operator.