US brands post better-than-expected sales

New York: Many top US retailers reported better-than-expected August sales, despite Hurricane Irene and sagging consumer confidence. Analysts expect the 24 retailers tracked by Thomson Reuters to post a 4.6 per cent gain in August sales at stores open at least a year.

Most of the early same-store sales reports were better-than-expected, with Gap Inc. among the few retailers to miss Wall Street's forecasts.

August is the peak of back-to-school shopping, the second-most important period for US retailers after the year-end holiday season. Sales in recent months have held up despite weak econ-omic indicators, offering hope for August and the rest of the year, until the hurricane disrupted shopping along the East Coast during a key weekend.

"August sales were good up until Irene," said Keith Jelinek, director of AlixPartners' global retail practice. "The consumer realised they needed to spend for back-to-school, [and] there were promotions to drive the traffic and get the dollars."

The next two weeks will be critical, he said, as stores work to clear back-to-school items and make room for fall and winter merchandise.

Costco Wholesale Corp, the largest US warehouse club and the biggest retailer to report monthly same-store sales, posted a higher-than-expected 11 per cent rise late on Wednesday last.

"August was a period like many others for Costco throughout the economic recovery, showcasing an upper middle-income consumer continuing to be fully engaged in the process of saving where applicable," Wall Street Strategies analyst Brian Sozzi wrote in a research note.

Costco also said legendary co-founder Jim Sinegal plans to step down as CEO in January.

Limited Brands Inc. also posted an 11 per cent increase, surpassing analysts' forecast of 7.6 per cent and its own call for a high-single-digit percentage rise.

Irene closes stores

Macy's Inc., which closed more than 100 stores for all or part of Saturday due to Irene, said the storm shaved about 1.5 per centage points from its August sales. Still, it posted a five per cent gain, topping the analysts' estimate of 4.5 per cent.

"We expect the hurricane's effect on sales will be substantially offset as we move through September and the third quarter," said Macy's CEO Terry Lundgren.

Target Corp. beat analysts' expectations of a 3.5 per cent gain with a 4.1 per cent increase.

While "the pace of the economic recovery is uneven and uncertain", Target had "solid results" in the back-to-school and back-to-college categories, said CEO Gregg Steinhafel.

The discount chain made moves such as putting dorm-sized refrigerators next to clothing in some stores to spur sales.

The monthly sales tally speaks to the strength of consumer spending, which accounts for roughly 70 per cent of US economic activity. Still, some major retailers saw brisk storm-related business, such as grocers, Home Depot Inc. and Wal-Mart Stores Inc.