U.S. Apparel Retailers Mostly Report Lower October Sales

(RTTNews) - A sampling of U.S. apparel retailers on Thursday mostly reported lower sales at established stores for the month of October, the last month of the retail industry's third quarter. Sales during the month were impacted by warmer-than-expected weather.

However, retailers are now looking ahead to the all-important holiday season. This year's holiday season sales are predicted to be stronger than last year, thanks to rising income and greater use of credit.

The National Retail Federation or NRF projects retail sales in November and December, excluding autos, gas and restaurants, to increase 3.6 percent to $655.8 billion. This compares to a 3.2 percent increase in holiday sales in 2015.

In late October, the Conference Board revealed in a report that consumer confidence in the U.S. decreased by more than anticipated in the month of October.

Sales at established stores or comparable-store sales is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.

L Brands, Inc. (LB), the operator of Victoria's Secret and Bath & Body Works chains, said its October comparable store sales increased 1 percent, reflecting strength in its Bath & Body Works brand. The company recorded comparable store sales increase of 6 percent in the same period last year.

Net sales for the month were $756.7 million, up 3 percent from $735.6 million last year. However, the company noted that the October merchandise margin rate was down to last year.

Looking ahead, L Brands said it expects same-store sales for the month of November to be up low single digits.

L Brands also reaffirmed its outlook for third-quarter earnings per share of about $0.40, down from $0.55 per share in the year-ago period.

Teen apparel retailer Buckle, Inc. (BKE) said that comparable store net sales for the month of October declined 15.5 percent from the year-ago period. Net sales for the month decreased 15.1 percent to $69.1 million from last year's $81.4 million.

Within the men's and women's categories combined, Buckle's accessory sales for the month were down about 20.5 percent compared to the same period last year, while footwear sales declined about 22 percent. These two categories accounted for approximately 8 percent and 7 percent, respectively, of the latest month's net sales.

Value-priced fashion apparel retailer Cato Corp. (CATO) reported that October same-store sales decreased 6 percent, and total sales also declined 6 percent from last year to $68.9 million.

John Cato, chairman, president, and chief executive officer of Cato said, "October same-store sales were below our expectations. However, markdown sales were less than anticipated."

For the third quarter Cato reported an 8 percent decline in same store sales. Revenue for the quarter declined 7 percent to $207 million from $223.3 million a year ago.

The company now projects third-quarter earnings of $0.24 to $0.28 per share, up from the prior range of $0.07 to $0.11 per share, and down compared to $0.30 per share last year.

Consequently, Cato said it will have higher markdown sales in the fourth quarter.