updated 8/4/2005 4:07:09 PM ET 2005-08-04T20:07:09

July was a quiet month for many of the nation’s retailers, who were left with only modest sales gains after selling most of their summer merchandise during June. Hot weather also wilted sales of some early fall items like sweaters.

Major Market Indices

As merchants reported their results Thursday, the winners appeared to be some discounters like Wal-Mart Stores Inc., BJ’s Wholesale Club Inc., and Costco Wholesale Corp., whose business was helped by sales of air conditioners and food items. But business was sluggish for many other apparel-focused stores including Federated Department Stores Inc., J.C. Penney Co. Inc., Limited Brands Inc., Gap Inc., and Kohl’s Corp.

“Sales fell short of expectations. Strong sales in June left stores with very little inventory,” said Ken Perkins, president of Retail Metrics LLC, a research firm in Swampscott, Mass. “And hot weather hurt sales of fall clothing.”

Still, while many retailers were disappointed by their July performance, their expectations for the month may have been too high. While consumers spent robustly in June, they no longer shop way in advance of a new season, and so they were unlikely to start buying heavier clothing now.

Even among teen retailers, the results were mixed, with Pacific Sunwear of California Inc. posting sales that beat expectations but Abercrombie & Fitch Inc. announcing sales that fell short of Wall Street forecasts.

Sales below average
According to Retail Metrics LLC’s tally of 65 retailers, sales were up 3.7 percent, below the 4.2 percent gain Perkins had expected. The tally is based on sales at stores opened at least a year, known as same-store sales. July’s results fell short of a 5.4 percent gain in June, and were slightly below the 3.8 percent same-store sales average for the first six months of the year, he said.

Perkins pointed out that rising oil prices could have also hurt spending among lower-income shoppers. He pointed to disappointing results at Family Dollar Stores Inc.

July is one of the least important months of the retailing year and is used by stores to clear out summer goods and start bringing in fall goods, but it nonetheless reflects consumers’ willingness to spend.

Wal-Mart reported a 4.4 percent gain in same-store sales. The results were in line with the consensus forecast of analysts polled by Thomson Financial. Wal-Mart’s total sales rose 10.7 percent.

BJ’s had a 4.7 percent gain in same-store sales, better than the 3.8 percent estimate. Total sales rose 9.3 percent.

“Sales results for the month of July reflected hotter weather throughout most of the chain versus last year,” said Mike Wedge, president and chief executive of BJ’s, in a statement.

Costco’s same-store sales rose 5 percent, better than the 4.6 percent estimate. Total sales rose 8 percent.

But Family Dollar had a 1.6 percent decline in same-store sales, worse than the 2.1 percent gain that analysts had expected. Total sales rose 5.7 percent.

Department stores struggle
Department stores, heavily dependent on apparel, had largely disappointing results.

Penney had a 1.6 percent gain in same-store sales in its department store business, less than the 2.4 percent estimate. Total sales rose 2.3 percent.

Federated had a 0.9 percent decline in same-store sales, well short of the 1.1 percent gain Wall Street projected. Total sales slipped 0.8 percent.

Kohl’s had a 0.5 percent decline in same-store sales, worse than the 1.9 percent gain that analysts had expected. Total sales rose 9.6 percent.

Talbots Inc.’s same-store sales rose 11.3 percent, surpassing the 8.3 percent estimate. Total sales rose 20 percent. In a statement, Arnold B. Zetcher, chairman, president and chief executive, attributed the strong performance to robust sales of its marked-down summer items.

Gap suffered a 4 percent drop in same-store sales, below the 0.9 percent gain that Wall Street had expected. Total sales were unchanged from a year ago.

Limited had a 1 percent gain in same-store sales, less than the 2.1 percent analysts expected. Total sales fell 3.6 percent.

Among teen retailers, Pacific Sunwear had a same-store sales gain of 4.0 percent, beating the 3.5 percent estimate. Total sales rose 14.2 percent.

Abercrombie & Fitch had a 22 percent increase in same-store sales, but the results were below the 28 percent estimate. Total sales rose 33 percent.

On Wednesday, teen retailer American Eagle Outfitters Inc. reported a 17.1 percent same-store sales gain, surpassing the 15.6 percent estimate. Total sales rose 25.4 percent.

But Aeropostale Inc., reported Wednesday a 4.2 percent drop in same-store sales, much worse than the 1.1 percent gain Wall Street expected. Total sales rose 18 percent. The company said it had disappointing sales of some of its fall clothing.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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