Early Comp Filers Show May Pickup

by MR Magazine Staff

NEW YORK – Four teen specialty retailers filing their May sales results ahead of Thursday’s rush all reported improvement over April’s dismal levels.

American Eagle Outfitters logged a 5% increase in comparable-store sales for the month, versus its 10% pullback in April. Aeropostale was up 1.9% on a same-store basis, versus a 14% contraction in the prior month. Zumiez built on its 3% April gain with an 11.2% gain in May.

Hot Topic didn’t break through into positive territory, but its 6.1% dip in May did mark an improvement over April’s 9.1% withdrawal.

April results were marred by unseasonal weather and a calendar shift that pulled Easter results into the prior month. Retailers and analysts cautioned that the combination of March and April results would be more indicative of the general tenor of business conditions, and that figures from May, the first month of retailers’ second quarter, would be the first month in which retail numbers wouldn’t be either inflated or deflated by calendar anomalies and, as the month developed, weather.

American Eagle Outfitters, based in Warrendale, Pa., posted an 18% increase in net sales during the four weeks ended June 2, growing to $199.2 million from $168.8 million in May 2006. The company said it “saw a meaningful improvement in comparable store sales compared to April, and experienced a positive customer reaction to key categories within its summer assortments.”

Year-to-date sales at AEO are up 17% to $811.6 million, and comps are up 6% for the year so far.

The company stood by its second quarter earnings estimates of $0.34 to $0.36 per diluted share.

Aeropostale’s net sales were up 19.3% in May to $88.1 million, putting year-to-date sales at $363.9 million, up 13.7%. Comps for the year are ahead 2.4%.

“During the month, we controlled our promotional cadence and level of inventory, resulting in gross margin increases over last year,” said Julian Geiger, chairman and chief executive officer of the New York-based specialty retailer. “We continue to execute at a high level during this transitional selling period and believe we are well positioned to maximize sales and margin opportunities during the upcoming back-to-school selling season.”

In City of Industry, Calif., Hot Topic reported May sales of $45.1 million, down 2% on a net basis. Sales for the first four months of the fiscal year wound up at $202.4 million, 1% of last year’s pace, while year-to-date comps are down 3.1.

Although Zumiez’s comp gain of 11.2% was smaller than its 18.2% uptick in May 2006, the active teen specialist managed a 51.6% increase in net sales for the month, to $22.7 million from $15 million.

Zumiez, based in Everett, Wash., didn’t provide year-to-date figures, but the combination of first quarter and May results indicates that sales for the first four months of the year are up about 45.7% to approximately $91.5 million.