Heat and discounts warm sales

Friday, 03 September 2010
On Thursday, U.S. retailers posted sales that beat modest expectations in August as consumers sought out bargains during the key back-to-school selling season. The warmest August in more than a quarter of a century also helped lift sales of what summer apparel remained on store shelves. The news lifted retail shares overall. Costco Wholesale Corp was flat and department store chain J.C. Penney jumped 2.1 percent. Teen apparel retailer Abercrombie & Fitch shed 4.6 percent on concerns over a drop in sales at its abercrombie chain for children.

Regarding the values included in the FashionUnited Top 100 Index which are on focus, Esprit Holdings, the world's No.8 apparel retailer by market value, on Thursday posted a 19 percent fall in fiscal second-half profit, lagging forecasts amid slower sales growth, euro weakness and soaring costs. According to Reuters, Esprit recorded a net profit of HK$1.53 billion ($196 million) for its second half ended June, down from HK$1.89 billion a year earlier. These figures were the trampoline for the Hong Kong based company’s stocks performance, up by 1.4% at mid-session on Thursday.

In the United States, Ross Stores, Inc. yesterday reported that sales increased 9% to $608 million for the four weeks ended August 28, 2010, up from $557 million for the four weeks ended August 29, 2009. For the seven months ended August 28, 2010, sales totaled $4.455 billion, an 11% increase over the $4.018 billion in sales for the seven months ended August 29, 2009.  

Also Zumiez thrown interesting hints for investors as analysts from Janney Montgomery Scott said that the group, with a diverse mix of popular brands and a "slightly increased" initial markup for its merchandise, has begun to show signs of improvement in its gross margin. On Sept. 1, the specialty sports apparel retailer said comparable-store sales increased 9.1 percent for the four-week period ended Aug. 28, vs. the average estimate by analysts of a 7.5 percent increase.

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