Retailers Post More Same-Store-Sales Declines

   DOW JONES NEWSWIRES 
 

Retailers reported another month of weak same-store sales in August, as back-to-school results came in worse than expected.

Industrywide, same-store sales fell for a 12th straight month - highlighting the woes reatilers have been under as consumer spending continues to decline. But with leaner inventories, companies are hoping to avoid the markdowns of last year's holiday season as sales then were even weaker than expected.

August results were also hurt by the late Labor Day holiday, meaning some schools started sessions later than last year. Another likely impact was the strong rebound in August U.S. auto sales on the "Cash for Clunkers" program. It was seen as steering some consumers away from retailers to showrooms.

Still, the sales decline was smaller than July's, and comparisons will continue to get easier in the coming months. Weak prior-year results in part helped cushion the August decline - year-earlier same-store sales rose a scant 0.2%, according to Thomson Reuters. That was the last increase for the industry.

Discounters had been holding their own amid the recession, but even they have been showing strains of late. Costco Wholesale Corp. (COST) reported flat same-store sales in the U.S. excluding gasoline, while smaller warehouse-club rival BJ's Wholesale Club Inc. (BJ) reported a 2.2% gain, another month of outpacing peers.

Off-price apparel sellers TJX Cos. (TJX) has been posting some of the best results of late, and analysts in recent days were sharply raising their August estimates, said Retail Metrics. It reported a higher-than-expected 5% gain.

Teen-apparel chains, especially Abercrombie & Fitch Co. (ANF), were expected to be the weakest performers by sector. Abercrombie again led the way down, posting a bigger-than-projected 29% same-store-sales slump for August. The company has seen big declines for months as price-conscious shoppers instead go to cheaper rivals like Aeropostale Inc. (ARO). It had record August results and a 9% increase. As such, it raised its earnings forecast for the quarter.

Another bright spot was Gap Inc. (GPS). It posted a much smaller-than-expected 3% decline on a surprise 4% increase at the long-struggling Old Navy chain.

Wal-Mart Stores Inc. (WMT) in May stopped reporting monthly sales data.

-By Kevin Kingsbury, Dow Jones Newswires; 212-416-2354; [e-mail]