Originally published September 7, 2007 at 12:00 AM | Page modified September 7, 2007 at 7:36 AM
Back-to-school boost for retailers
A strong back-to-school shopping season helped retailers beat analysts' expectations for August sales, raising hopes that Americans will...
Analysis |
A strong back-to-school shopping season helped retailers beat analysts' expectations for August sales, raising hopes that Americans will keep spending. Still, analysts remain cautious amid high gasoline prices and declining home values in many areas.
Consumer spending accounts for more than two-thirds of U.S. economic growth. The August-to-September back-to-school period sets the tone for the crucial holiday season, when retailers make up to half of their annual revenue. "Wall Street has already written off the consumer, which may be a mistake," notes Deutsche Bank analyst William Dreher Jr. Target (TGT), which reported better-than-expected August results, is among his top picks.
For department stores, August and September same-store sales have a 91 percent correlation with fourth-quarter results, according to Bear Stearns analyst Christine Augustine. The correlation is slightly weaker for discounters (86 percent) and teen retailers (84 percent).
Stronger traffic and demand buoyed same-store sales for retailers from discounter Wal-Mart Stores to preppy Abercrombie & Fitch to upscale Saks and Nordstrom. Results from warehouse-store chain Costco, reported Wednesday, disappointed analysts, however.
Same-store sales allow for year-to-year comparisons, unlike sales at new stores. Thomson Financial's Same Store Sales index rose 3.1 percent last month, down from 3.9 percent in August 2006. The index, though, topped analysts' expectations of 2.5 percent growth.
Among 45 retailers, two-thirds beat expectations. That suggests "the consumer is still engaged," says Thomson Financial analyst Jharonne Martis.
The August results got a boost from several special factors. Later back-to-school dates in several districts pushed sales into August from July, while cool weather helped fall fashion sales. Strong employment and income trends have lifted consumer spending. Analysts are looking for the U.S. government to report next week that overall retail sales grew 0.2 percent last month. That would be down slightly from 0.3 percent in July.
Copyright © 2007 The Seattle Times Company
Chase shrugs off loss of CD investors
Sunday Buzz: Expedia, Intelius, Classmates slapped by Senate report
Denny Triangle gains skyline, but tenants slow to come
UPDATE - 04:28 PM
Senate Democrats at odds over health care bill
Your Funds: Money for nothing: Some investors pay for advice they never get

LA Galaxy's David Beckham
Los Angeles Galaxy's David Beckham talks about the upcoming MLS Cup final during after a team practice.
nwjobs

Post a comment

Michelle Goodman blogs about work/life balance.
How to tell your office you're gravely ill
Post a comment
nwautos

Choosing a new sedan? Weigh the impact of your choice on your wallet and on the planet.
Post a comment
- 'The Road' takes Viggo Mortensen to Mount St. Helens and Astoria, Ore.
- Craigslist adoption ad: A plea by young mother-to-be? A scam?
- Italian lead prosecutor argues Knox motive was hatred
- Italian prosecutors request life sentence for UW student
- Tugboat sinks on Seattle's waterfront
- Child-support error costs nearly $21,000
- Man shot in chest on E. Union Street in Capitol Hill
- Washington state wines make annual best-of list
- Chase shrugs off loss of CD investors
- Mariners Blog | A Mariners-Tigers swap makes a whole lot of sense for both teams
- Senate vote clears hurdle
236 - Tight Senate vote launches health care over hurdle
119 - Child-support error costs nearly $21,000
118 - Vikings easily beat the Seahawks
115 - Palin excitement builds in Tri-Cities
115 - Prosecutor requests life in prison for Amanda Knox
87 - Cutting through breast-cancer confusion
86 - Game thread
70 - New York terror trials will restore faith in rule of law
52 - Chase shrugs off loss of CD investors
47
- Washington state wines make annual best-of list
- Nonprofits get creative using Twitter and Facebook to make donation easier
- It's possible to recover a life lost to hoarding
- Lynnwood is reinventing itself — again
- Great places to cross-country ski for free (or almost) in the Methow
- 'The Road' takes Viggo Mortensen to Mount St. Helens and Astoria, Ore.
- Child-support error costs nearly $21,000
- Recipes: Sesame Pork Roast, Sour Cream Mashed Potatoes, Gingerbread with Lemon Sauce and more
- Banff: powder, peaks & purity
- 175 foster kids in Washington get 'forever families'









