Tags: Retailers | Discounts | Back-to-school | Shoppers

Retailers Rely on Deep Discounts to Win Back-to-School Shoppers

Thursday, 05 Sep 2013 10:00 AM

Many U.S. retailers reported stronger-than-expected August sales on Thursday, but they had to use steep discounts to woo back-to-school shoppers.

The unusually high level of discounting raised concerns about margins for this quarter. It also showed that apparel chains might have to keep offering bigger incentives at a time when consumers are spending more on their homes, cars and other durable items.

The level of discounting "was certainly higher than last year," said Ken Perkins, president of consulting firm Retail Metrics. "They seem to be above the norm. That was emblematic of just the lack of demand for back-to-school."

Editor's Note: Save, shop and invest like an insider! Our experts lead the way each month in The Franklin Prosperity Report. Click here to learn more.

The back-to-school season is the second-biggest selling period of the year for U.S. retailers, behind the winter holidays.

Analysts were estimating a 3.1 percent rise in August sales at stores open at least a year at the retailers tracked by Thomson Reuters I/B/E/S. Most, including Costco Wholesale Corp. and Buckle Inc., beat expectations for the month on Thursday, while Victoria's Secret parent L Brands Inc. missed estimates.

Same-store sales are an important measure of a retailer's performance because they strip out the effects of store openings and closings.

Fewer than a dozen U.S. retailers report monthly sales, down from a peak of 68 in 2006. In the years since, big names such as Macy's Inc., Wal-Mart Stores Inc. and Best Buy Co. Inc. have dropped out of the same-store sales index.

Mall-based apparel chain Cato Corp.'s same-store sales fell 2 percent, while analysts expected a 3 percent drop.

"We remain cautious in regard to the remainder of the year," Chief Executive Officer John Cato said in a statement.

Buckle, which caters to teenagers, reported a 1 percent rise, beating estimates of a 0.4 percent increase.

Costco's same-store sales, including those of gasoline, rose 4 percent, just beating analysts' expectations of a 3.8 percent gain. Demand was strong for health and beauty aids and food, but weak for electronics, the largest U.S. warehouse club chain said.

Stein Mart Inc. also topped same-store sales forecasts for the month, reporting a 3.8 percent rise on strong demand for everything from linens to women's dresses.

Walgreen Co., the largest U.S. drugstore operator, reported a 4.8 percent increase, while analysts had expected only a 2.8 percent rise.

Editor's Note: Save, shop and invest like an insider! Our experts lead the way each month in The Franklin Prosperity Report. Click here to learn more.

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
Economy
Many U.S. retailers reported stronger-than-expected August sales on Thursday, but they had to use steep discounts to woo back-to-school shoppers.
Retailers,Discounts,Back-to-school,Shoppers
423
2013-00-05
Thursday, 05 Sep 2013 10:00 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved