The European markets finished in the red across the boardon Wednesday, dragged down by concerns over a possible Greek exit from the Eurozone and worry over the banking situation in Spain.
Meanwhile, Japan’s Nikkei tumbled 1.8% as of 11:45 a.m. in Tokyo. The Shanghai Composite lost 0.7% and the Hang Seng fell 1.4%. The S&P/ASX All Ordinaries shed 0.9% and the Sensex dropped 1%. In USA, industry watchers are anticipating May same-store sales to show only modest growth for the retail sector when some of the largest U.S. merchants release their figures early Thursday.
According to a poll by Thomson Reuters, analysts are expecting May same-store sales to climb only 2% compared with 5.4% for the same period in 2011. Analysts are anticipating mixed results from the two leading discount chains.
As reported by ´MarketWatch´, Gap Inc. (US:GPS) same-store sales are seen as coming in 3.1% higher, compared to the 4% drop recorded last year, while TJX Cos. sales are seen growing 5.3%, up from the 2% recorded in May 2011. Ross Stores Inc. sales should climb 5.3%, bettering last year’s 4% showing.
Weaker growth is expected for Limited Brands Inc. Same-store sales for the fashion-apparel marketer are expected to only grow 4.7%, down from the 6% posted in the year prior. The company announced yesterday that James MacKenzie would be replaced by non-executive director and Nine Entertainment's chairman, Peter Bush, on June 30. His appointment comes two weeks after Pacific revealed takeover talks with potential suitors had failed to reach a deal. Shares in Pacific Brands closed half a cent higher at 55.5 cents despite falls on the broader market. It suffered a first half net loss of $362.4 million and expects full year earnings before interest and tax and before significant items to be between $125 million and $130 million.
Teen-fashion merchants are another weak spot. Zumiez sales are expected to climb 6.6%, compared with 7.8% last year. Actually, Zumiez shares advanced 2.47% to $35.63 in post-market trading, becoming one of the movers of the session in Wall Street. The teen apparel chain announced in after-market hours Wednesday that its May comps surged 13.7%, doubling the expectations.
In contrast, high-end retailer JW Nordstrom Inc. (US:JWN) should stage the best performance, with same-store sales rising 4.7%, but still down from last year’s 7.4%. Saks Inc. (US:SKS) is thought to post sales growth of 2.5%, in stark contrast to the 20.2% boost it reported last May. Macy’s would climb 4%, slightly below the 7.4% in the previous year’s period. Kohl’s Department Store is expected to turn in the weakest performance, with sales dipping 1.2% in the month of May. Last year, the retailer posted growth of 0.8%.