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Summer Retail Is a Bust But Watch Out for a Strong Fall: Paul Walsh

·Nicole Goodkind
Summer Retail Is a Bust But Watch Out for a Strong Fall: Paul Walsh

July retail sales fell short of expectations this morning, rising by 0.2% versus estimates of 0.3%.

Last month's unseasonably cool weather will affect the back-to-school shopping season, one of the most important shopping events of the year for retailers.

“Typically in the summer the weather doesn’t have a huge influence on us,” explains Paul Walsh, vice president of weather analytics at The Weather Channel. “But we’ve been experiencing this amazing volatility and I think that’s really started the mojo going for back-to-school earlier than it has in the last three or four years, so it’s actually a really good tailwind for retailers.”

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Walsh believes the cool weather will ultimately help retailers, especially specialty retailers and department stores that support seasonable product categories.

Last year Hurricane Sandy crimped sales for many retailers as malls in the Northeast were closed for weeks. Walsh does not expect this year's storms to make such a big dent in retailers' bottom line.

“More than likely we won’t see a hurricane of that size this year, so these stores will gain back a couple of days of sales that will go into their quarter three earnings,” says Walsh.

Stores likely to see a boost in sales this Autumn will be Kohl’s (KSS), Wal-Mart (WMT), and JCPenney (JCP).

Some teen retailers, like American Eagle Outfitters (AEO) and Aeropostale (ARO), have warned that the cool summer season will hurt sales.

“Last year was the warmest summer on record so they would have had a good tailwind from the weather but this year it was gone," Walsh says. "So they’re up against difficult weather comparisons from last year."

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As for companies reporting this week, Kohl’s is the most likely to see a weather impact. “Kohl’s doesn’t have as broad of an assortment so they’re most exposed to weather,” says Walsh. “They may have had a difficult time because it’s been so cool across the summer months.”

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