September retail sales came in mixed across the retail landscape. As shown in the Wall Street Journal graphic below, Stage Stores, Gap and Costco all had solid months with same store sales gains of 11%, 6% and 5%, respectively.


On the other hand, Kohl’s saw a 2.7% drop in same store sales while Wet Seal saw a whopping 12.7% decline. This suggests a very high probability that these stores will be stuck holding overstock inventory for liquidation.

Some other reported results include: Macy’s, which came in with 2.5% growth on expectations of 3.3%; TJX had a solid quarter with 6% growth vs. expectations of 4.5%; Limited Brands grew 5% vs. 4.3% expected growth; and Nordstrom delivered only 4.4% growth vs. an expectation of 5%.

The expectations for growth drive retailers inventory choices and planning. Of course, when sales don’t materialize at the expected level, unsold inventory results which will eventually find its way to the secondary market. This is ultimately forced into markdowns or liquidation. Of course, soft sales will generally result in lower returns on an absolute basis, but maybe not as a percent of sales. That depends on many factors.

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