Dive Brief:
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L Brands, owner of Victoria’s Secret and other brands, reported a better-than-expected 6% same-store sales increase in June, but warned it might fall in July. Its Victoria’s Secret sales grew 6% and Bath & Body Works sales increased 7%. Total sales rose 7% to $1.3 billion for the five weeks ended July 2, compared to $1.21 billion a year ago.
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Struggling Gap Inc. also reported a healthier June, with same-store sales across all brands rising 2%, beating analyst expectations of a 3.6% fall, led by Old Navy’s same-store sales rise of 5%, which beat estimates of a 3.3% fall.
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Costco Wholesale Corp. reported flat U.S. and global June same-store sales, including gasoline sales and currency fluctuations, but were up 1% in Canada and down 3% internationally. Excluding gasoline and currency effects, Costco's U.S. sales rose 2%, Canadian sales rose 7% and international sales rose 2%, and global same-store sales increased 3%. But those flat sales beat many analyst expectations for a 1.5% decrease, according to theStreet.
Dive Insight:
Overall, June apparel same-store sales were down 0.2%, beating estimates for a 1.3% drop. Teen apparel was down 8.3%, beating analysts' 8.4% estimate, and discount sales were flat, beating estimates of a 1.4% drop, according to Thomson Reuters.
Costco showed some strength in June, despite fallout from its credit card switch from American Express to Citi Visa, which left some members with no store-branded card to use for a while. For Barron's, Costco’s performance is further evidence that the membership-based retailer is “Amazon-proof,” according to a blog post. Barron’s cites a note from UBS analyst Michael Lasser, which contains expectations of further growth and said that Costco's credit card debacle means that its results would have been “even better” and that the switch will prove to benefit the company.
Another bright spot: Gap’s report, which shows some signs of the turnaround that CEO Art Peck has been pursuing since he took the post in 2014. While Old Navy had long been the apparel retailer’s saving grace, that brand, too, has faltered in recent months. Old Navy's downturn has apparently been halted, at least for now.
But L Brands hit sour notes last month, and its shares took a hit for it. Shares fell more than 2% Thursday, recovered somewhat, but remained down.