The U.S. Commerce Department released its June retail sales figures this week, and the verdict isn't good. Like a kid learning how to ride a bike, American retailers seem to run head-on into a tree every time they build up a little speed. Fortunately for investors, the news wasn't all bad. A handful of companies have managed to ride all the way around the block without taking a trip over the handlebars.
What the report told us
As with all government reports, there's an up and a down. While sales are up 3.8% against last year, they took an unexpected 0.5% fall between May and June 2012. Forecasts of growth were stymied by lower employment and general pessimism. The month-on-month fall represents the third month in a row that sales figures have fallen sequentially.
While the monthly figures have declined, sales continue to be stronger than they were in 2011. The difference in the two growth rates indicates that while the economy is growing, its pace is slowing considerably. In fact, the last time America experienced three straight months of decline was back in 2008, when things were looking their bleakest. The fall caused major firms, including Morgan Stanley, to drop second-quarter 2012 economic growth forecasts.
The losers
One of the biggest losers was retail chain Kohl's (NYSE: KSS), whose June same-store sales dropped 4.2% compared to 2011. Kohl's has had a disappointing run recently, with a slight fall in same-store sales in its last quarter. The comparable-sales decline is the driving factor behind the company's overall revenue fall in June, with overall sales down 2.6% compared to last year. Kohl's management was optimistic about growth, though. Sales started to pick up near the end of June, as the company repaired its inventory levels.
Kohl's wasn't the only stain on the face of June retail. Jeans fashion retailer Buckle (NYSE: BKE) announced a 2.5% decline in same-store sales for June.
These two retailers were in line with the general mood of the Commerce Department report. Sales were down or flat in almost every category, when compared to May. Retailers have also faced a year-on-year battle, as last June was particularly good for many Main Street retailers. Luckily, a few big names managed to buck the trend and do well in June.
The winners
Clothing retailer Limited (NYSE: LTD) managed to hop on its little bike and pedal like a madman. Same-store sales rose 7% in June, keeping up the 7% pace that the company has set so far this year. While overall sales were down slightly from 2011, the 2011 figure was inflated by $80 million due to the company's now-defunct third-party sourcing business. June's revenue was up 8%, using the revised 2011 numbers.
Ross (Nasdaq: ROST) is also topping the competition. Along with 7% growth in same-store sales, the company racked up a 12% revenue increase in June. The most recent report was just another in a series of excellent bits of news to come out of the retailer. This year has gone better than expected, with year-to-date sales up 13% and same-store sales up 8%. Apparently consumers are pulling back on overall purchases, but finding a few places they like a whole lot to shower with their remaining cash.
Ahead of even Ross, we find high-end retailer Nordstrom (NYSE: JWN), which posted an 8.1% same-store sales increase in June. Overall sales increased 13% to $1.9 billion. Year-to-date figures are in line with June, and the rest of the year is looking positive, as well.
The bottom line
Nordstrom is clearly free of its training wheels. The company is posting fantastic numbers so far this year, and has some excellent plans for the rest of 2012. Last week, it announced a partnership with London-based fashion chain TOPSHOP. The line will be featured in 14 Nordstrom locations throughout the U.S. and should prove to be a great new source of revenue for both brands.
While Nordstrom is doing well, it's not hot enough to be The Motley Fool's Top Stock for 2012. This retailer is making inroads across the world, and the Fool's report details exactly why it's going to continue dominating its space. You can get the report free, for a limited time. Go ahead and get your copy today.
