An apparel turnaround awaits

The climate for apparel sales has not been good this year, and Target has felt the impact, routinely reporting double-digit monthly same-store sales declines. There was some relatively good news in the apparel category last week though, as some of the nation’s leading department stores reported second-quarter results in advance of Target. Retailers such as Macy’s, JCPenney, Kohl’s and Nordstrom all reported weak second-quarter sales trends, yet still managed to meet or exceed analysts’ estimates through expense control and careful inventory management. In Macy’s case, it did so at a decent margin, reporting second quarter earnings per share of 20 cents that exceeded estimates by a nickel. Kohl’s beat that by a penny with its 75-cents-a-share profit it reported. And even though JCPenney’s profit was flat, it was still better than the one-cent-a-share loss analysts forecast and Nordstrom’s 48-cents-a-share figure was inline with forecasts. Target doesn’t break out the performance of its apparel business specifically, but the relative success of other retailers with even greater exposure to apparel than Target is good news for the company.