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Early results from retail reports show many had a blow out September with staggering sales gains. Kohl’s posted a +16.3% same-store sales gain and the wholesale change in the weather was a big reason for the strong showing.
“This September showed the 2nd greatest change toward colder and wetter weather in at least 112 years and that was certainly the catalyst that sent consumers flocking to the stores boosting retail same-store sales gains above Wall Street’s expectations”
Weather Trends International CEO Bill Kirk.
The extreme year-over-year changes in the weather and other business factors like a 21% decline in gasoline prices have most retailers smiling this morning at their great September performance. The exceptions were Home Centers who blamed the lack of hurricanes on lower than expected results. Last year had three major U.S. impacts from Katrina, Ophelia and Rita and none this year. Home Centers benefit from expensive storm related purchases of lumber, power tools, generators and other high margin items. Below are the weather and business highlights for this past September:
1. September 2006 is estimated to be the 25th coldest in 112 years for the 2nd greatest year-over-year change toward colder weather vs last year’s 4th hottest in history. This year 87% of the country trended much colder than last year.
2. September 2006 is estimated to rank as the 8th wettest in 112 years for the 2nd greatest change toward wetter weather ever, recall last year was 11th driest in 112 years. The week of Labor Day was the wettest in 14 years which helped to end the Summer season up to 6 weeks earlier than last year, a plus for retailers fully stocked with Fall items.
3. Last year 3 hurricanes impacted the U.S. during September and this year none. Last year, there were already 20 named storms by September, this year only 9.
4. Gasoline prices are down 21% vs a year ago averaging $2.31 vs $2.93 last year.
5. The number of September tornadoes are actually down for the third straight year with 91 reported vs 133 a year ago September and 297 the year prior to that.
6. Snow is off to a very early start with 18″ in the Rocky Mountains vs none last year.
7. Last year, there were widespread droughts, this year flooding made headline news.
8. Last year was a La Nina event and this year a strengthening El Nino that will dominate the news in the year ahead.
9. Retail markdowns were excessive last year and this year the weather was the catalyst for seasonal sales minimizing the needs for markdowns.
10. Inventory was excessive last year but very lean this year.
Overall, all of this adds up to a very strong showing for most retailers with same-store sales expected to come in much higher than Wall Street is expecting today!