Select Retail Sales Slow in May: Sign of a Wider Consumer Slowdown?

Small Cap Watch List member Aeropostale, Inc. (ARO) announced that total net sales for the four-week period ended June 2, 2007 increased 19.3% to $88.1 million, from $73.9 million for the four-week period ended May 27, 2006. Same store sales for the month increased 1.9%, compared to the corresponding four-week period ended June 3, 2006.

The same store sales figure represents a slowdown from the 2.9% March-April average (both of which months were affected by the early Easter) and the 2.4% year-to-date figure.

Mid Cap Watch List and Large Cap Watch List member Abercrombie & Fitch (ANF) reported net sales of $215.0 million for the four-week period ended June 2, 2007, a 16% increase over net sales of $185.7 million for the four-week period ended May 27, 2006. May comparable store sales decreased 5% for the four-week period ended June 2, 2007, compared to the four-week period ended June 3, 2006. Those results mark a slowdown from the 4% same store sales decline last month.

The Cato Corporation (CTR) reported sales of $75.9 million for the four weeks ended June 2, 2007, a 3% increase over sales of $73.8 million for the four weeks ended May 27, 2006. Comparable store sales for the month increased 2%, which is more or less in line with the results over the last two months.

Granted, a few mall-based teen retailer does not necessarily represent what is happening in the broader economy. But if the coming same-store sales numbers at other retailers follow suit, it has bad implications for the last remaining leg holding up the GDP stool.