Retailers Report Disappointing Sales In July

Thursday, August 9th 2007, 7:19 am

By: News On 6

NEW YORK (AP) _ The back-to-school shopping season had a disappointing start in July as consumers rattled by a weakening housing market and other financial pressures stayed away from stores and malls.

As merchants reported sluggish monthly sales results Thursday, the weakest performers included teen merchants Pacific Sunwear of California Inc. and Wet Seal Inc.

``Overall, July sales were negatively impacted by soft mall traffic,'' said Ken Perkins, president of RetailMetrics LLC, a research company in Swampscott, Mass. ``The consumer is holding up, but certainly feeling the pinch of the housing market and higher gasoline price.''

July's results extended the slowing sales trend retailers have experienced since February as consumers are forced to pay more for food and gas. The slumping housing market and a widening credit crunch, both of which have made the stock market turbulent, are also making consumers shy about spending.

Costco Wholesale Corp. was among the stronger performers, reporting a 7 percent increase in same-store sales, exceeding the 5.5 percent estimate predicted by analysts polled by Thomson Financial. Same-store sales are sales at stores open at least a year and are considered a key barometer of a retailer's health.

Limited posted a 3 percent same-store sales drop, worse than the 0.5 percent analysts expected.

Wet Seal suffered a 7.2 percent decline, worse than the 5.0 percent projected.

Pacific Sunwear had a 4.6 percent slide; analysts had anticipated a 3.2 percent gain.

Bebe Stores Inc. posted a 6.3 percent decline, steeper than the 4.6 percent forecast.