May was a good month for many specialty retailers, and it's apparent that clothing -- in particular women's apparel -- was flying off the racks. With Memorial Day and summer beach holidays and barbecues approaching, shoppers took the opportunity to update their summer wardrobes, adding up to some pretty exciting same-store sales figures.
Ann Taylor (NYSE: ANN) reported May same-store sales higher by 9.9%, with total sales up 23.7%. But, as has been the case in the past, also evident in its most recent quarter, the strength emanated from the Ann Taylor Loft chain, which reported a 29.6% increase in comps, while Ann Taylor still struggled, with a comp decrease of 1.6%.
Talbots (NYSE: TLB), a specialty retailer that targets the demographic of women ages 35 to 55, just like its rival Chico's FAS (NYSE: CHS), gave a better-than-expected report of same-store sales, with an 8.1% increase. Total sales increased 10%.
However, Chico's blew Talbots away, with its same-store sales increasing 17.9% and total sales rocketing 50.7%. It's not hard to imagine, since we got a taste of Chico's charms last week when it reported first-quarter earnings. (Chico's wasn't kidding when it said its strong trends were continuing into May!)
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pick Gap (NYSE: GPS) continues to regain respectability, with May same-store sales lifting 6% and total sales up 7%. It may not be the blazing numbers that other retailers reported, but Gap has plans up its sleeve, including an attempt to ditch its old teen retailer image and expand its customer base with a new ad campaign. All its units, including Old Navy and Banana Republic, reported increased comps, with the exception of its international Gap unit, which was down 3%.
Limited (NYSE: LTD) was a little more subdued, with same-store sales up 3% and total sales also up 3%; the most impressive performance came from its Victoria's Secret chain, which had a 10% increase in comps. Its Limited and Express concepts continue to struggle, judging by Express' flat comps, with Limited down 11%.
Another women's retailer, bebe (Nasdaq: BEBE), reported same-store sales up 10.2%, with total sales up 15.4%. It was the only one that upped its quarterly profit view in conjunction with its strong same-store sales numbers.
Doing a quick comparison, Ann Taylor's forward P/E of 15 makes it look like one of the cheapest stocks in the bunch, and it may be worth a closer look. The risk is whether it can succeed in its goal of bringing new success to Ann Taylor by integrating what has worked for Loft. Meanwhile, though Chico's has a rich forward P/E of 28, it looks like an interesting stock to watch, given what appears to be a runaway popularity with shoppers.
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Alyce Lomax does not own shares of any of the companies mentioned.
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