September 6, 2013
Consumers’ cautious spending on clothing extended into August, capping a weak back-to-school season for retailers.
Several of them, including L Brands Inc., posted disappointing revenue for the month, which falls in the middle of the second-biggest shopping period of the year.
Yesterday, L Brands — formerly known as Limited Brands — reported August comparable-store sales rose 2 percent, about the same as Wall Street expectations.
The Columbus-based parent company of brands such as Victoria’s Secret, Bath & Body Works and La Senza, reported August sales of $704.7 million, up from $665.6 million for the same month a year ago.
Victoria’s Secret saw comparable-store sales rise by 3 percent, much better than analysts’ expectations of a 1.4 percent rise. Bath & Body Works saw comparable store sales rise by 1 percent, less than analysts’ expectations of a 2.5 percent rise. Canadian lingerie brand La Senza saw comparable-store sales rise 8 percent, a great deal better than expectations of a 2.5 percent rise.
The retailer built up its merchandise inventory during the month “to support upcoming significant product launches at Victoria’s Secret and Bath & Body Works” during the important fall and winter shopping season, said Amie Preston, chief investor relations officer.
L Brands was cautious in reporting its expectations for September, Preston said.“We are planning for positive low single-digit (comparable-store sales).”
“Overall, the month was mediocre for sales,” said Michael P. Niemira, chief economist at the International Council of Shopping Centers. “The back-to-school season started late, and it never had momentum.”
Overall, revenue at stores that have been opened at least a year — a measure of a retailer’s health— rose 3.7 percent in August, according to a preliminary tally of eight retailers by the International Council of Shopping Centers. That’s up slightly from July’s
3.5 percent gain, but below the 6 percent gain in August last year.
The results raise questions about whether Americans will spend during the winter holidays in November and December, a time retailers can make up to 40 percent of their revenue for the year.While the back-to-school season, which runs from mid-July through mid-September, isn’t an absolute predictor of how Americans will spend during the winter holidays, it does offer insight into consumers’ mindset.
Information from the Associated Press was included in this story.