Barclays on U.S. Retail Softlines: May Sales Preview

Barclays on U.S. Retail Softlines: May Sales Preview

Barclays analyst says, "Zumiez (Nasdaq: ZUMZ) will report May sales results at the close on Wednesday, June 1st, and Gap (NYSE: GPS), Limited (NYSE: LTD), Ross Stores (Nasdaq: ROST), and TJ Maxx (NYSE: TJX) will report May sales on Thursday, June 2nd."

"Our sense is overall May results were okay, but retailers may not have gotten the build they anticipated from Memorial Day weekend. Mall traffic was flat in the final week of the month and remained consistent with weeks 2 and 3 on a two-year basis. For the month, mall traffic was flat in May versus the 4% increase in April. On a two-year basis, mall traffic was flat at +2% in May, similar to April."

"We got some good checks on May from 1Q earnings calls over the past few weeks, so we don't expect any major surprises. Specialty retailers that indicated sales trends had improved or were off to a good start included American Eagle (NYSE: AEO), AnnTaylor (NYSE: ANN), Chico's (NYSE: CHS), and TJX. We also sense that business was good at Express (Nasdaq: EXPR), LTD, and ROST. Aeropostole (NYSE: ARO) and Pacific Sunwear (Nasdaq: PSUN) reported disappointing starts and we think GPS is likely struggling. We expect Urban Outfitters (Nasdaq: URBN) to release its 10-Q after the close on 6/8/11 or on 6/9/11 and expect comps will have weakened from -1% (including direct) in 1Q given April included an extra Saturday and May lost a Saturday and we continue to see promotions in store."

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