Price cuts, hot weather lured shoppers to spend in July
American shoppers proved resilient in July, driving a key sales figure up at retailers across the country, despite persistent worry about...
The Associated Press and Seattle Times business staff
NEW YORK — American shoppers proved resilient in July, driving a key sales figure up at retailers across the country, despite persistent worry about jobs and the global economy.
Results came in better than expected for many retailers, helped by hot weather and summer-clearance sales, an encouraging sign as the back-to-school season, the second-biggest shopping season behind the holidays, kicks off.
Seattle-based retailer Nordstrom posted a 0.9 percent gain in sales at stores open at least a year, led by a strong performance at its off-price Rack division.
Sales were pressured in July because Nordstrom's 17-day Anniversary Sale started a week later this year than last, pushing some of the promotions into August, but it still managed to beat analysts' projection for a 2.7 percent drop.
A preliminary tally by the International Council of Shopping Centers of 20 retailers found revenue in stores open at least a year rose 4.6 percent in July, higher than the 3 percent to 3.5 percent the ICSC expected.
Summer-clothing purchases drove the increase. The sales figure rose 9.2 percent for clothing, the largest monthly increase since April 2011, according to the ICSC.
"Hot weather and summer clearance, coupled with some newness in stores in the back half of the month, is leading to a nice upside heading into back-to-school," said Ken Perkins, president of Retail Metrics, a research firm.
Analysts had expected modest gains in the month, which was the hottest July in 50 years, according to research firm Planalytics. But Americans shrugged off high unemployment and the bumpy global economy to hit the mall, spending more than expected.
On Wednesday, Issaquah-based Costco Wholesale posted a 5 percent increase, helped by strength at stores in the U.S., while Lynnwood-based clothing chain Zumiez reported 7.5 percent growth for July.
Discount stores were among the best performers. TJX Cos., which operates TJMaxx and Home Goods stores, and Ross Stores both reported better-than expected sales for the month and raised their earnings projections for the second quarter.
Gap was a surprise outperformer. Revenue in stores open at least a year rose 10 percent, handily beating expectations for a 3.8 percent gain. The figure rose 13 percent at Gap stores, 12 percent at Old Navy and 8 percent at Banana Republic.
Target also performed well, with revenue in stores open at least a year up 3.1 percent in July, as more shoppers visited its stores. Analysts had expected the measure to rise 2.7 percent.