Skip to main content

Market Overview

August Retail Sales: The Early-Month Tax Holiday, Labor Day Shift And Three Brands To Look At

Share:
August Retail Sales: The Early-Month Tax Holiday, Labor Day Shift And Three Brands To Look At

In a report issued Friday, Wedbush analysts Morry Brown and Taryn Kuida shared a recap of August retail sales, which came in mixed, but largely in line with expectations. “Labor Day shift more than offsets [the] early month tax holiday benefit,” the report stated. Same store sales also came in relatively in line with projections.

The experts highlighted L Brands Inc (NYSE: LB)’s “impressive comp performance” as the main driver of the month’s same-store sales.

Meanwhile, Gap Inc (NYSE: GPS)’s comp miss was attributed to the move of Labor Day weekend from August to September.

Below is a closer look at some company-specific comments from the research note.

Related Link: Retail Earnings Season Winds Down

Buckle

Buckle Inc (NYSE: BKE) reported a 3.3 percent decline in comps over August. While results came in slightly below estimates, they still implied a 500 bps surge “on a two-year stack basis from July – suggesting the calendar impact meaningfully hurt July.”

The women’s segment continues to underperform, having posted a 10 percent fall in comps, while men’s reported an 11 percent surge for August.

Denim was also soft, and, if it “does not strengthen in September, the view that BKE could be a beneficiary of improving trends in the category would appear more suspect,” the note concluded.

Gap

August saw Gap’s same-store sales decline by 2 percent, falling short of estimates, which called for at least flat comps. The analysts note that, “The benefit from the tax holiday shift was more than offset by the negative impact of Labor Day weekend moving from August to September. The month of August decelerated 300 bps on a two-year stack basis compared to July,” with Gap decelerating 500 bps and Banana Republic, 900 bps.

On the other hand, Old Navy witnessed a 200 bps acceleration.

The experts highlighted that “Banana Republic was negatively impacted the most by the shift because they benefit the least from the tax free holiday, while Old Navy benefited from a strong BTS season.”

L Brands

Finally, L Brands, the outperformer, delivered robust August same-store sales growth of 6 percent, well above consensus of 2.5 percent. “Merchandise margins were indicated up year-over-year while inventory was up 2 percent in August,” the report added. “Looking ahead, management guided to a L-MSD comp for September.”

Image Credit: Public Domain

Latest Ratings for LB

DateFirmActionFromTo
Mar 2021Credit SuisseMaintainsUnderperform
Feb 2021Credit SuisseMaintainsNeutral
Feb 2021Morgan StanleyUpgradesEqual-WeightOverweight

View More Analyst Ratings for LB
View the Latest Analyst Ratings

 

Related Articles (GPS + LB)

View Comments and Join the Discussion!

Posted-In: Banana Republic Morry Brown Old NavyAnalyst Color Long Ideas Retail Sales Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
PBTruist SecuritiesMaintains88.0
CFRTruist SecuritiesMaintains111.0
FANGTruist SecuritiesMaintains105.0
NPOOppenheimerMaintains95.0
SBNYCredit SuisseMaintains250.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com