After Hurricane Joaquin devastated parts of The Bahamas as a Category 4 storm; wreaked havoc on Bermuda; and pounded South Carolina with heavy winds and rains over the weekend, it’s no wonder market watchers are focused on weather these days.
The most recent retail traffic data shows an ongoing lag in traffic at footwear and apparel retailers. And, weather, of course, has taken a huge share of the blame for less-than-ideal retail traffic in recent weeks.
According to a report by Citi Research analyst Kate McShane, which uses data from ShopperTrak’s Market, total U.S. retail visits were down 3.27 percent year-over-year during the fifth week of September. For the entire month of September, traffic declined 3.56 percent year-over-year.
Cowen and Co.’s retail team pointed out, in an Oct. 5 note, that although retail traffic numbers remained in the negative, they were slightly better than the prior week’s decline of 5.51 percent.
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While unseasonable weather continues to impact store traffic, Cowen’s team said the impact of Hurricane Joaquin on store traffic, during the past week, was minimal.
“Cooler temperatures across the Northeast and Midwest drove a pickup in apparel traffic, more than offsetting the disruption from the hurricane threat,” the Cowen report said.
Meanwhile, Cannacord Genuity Inc. analyst Camilo Lyon said the fact that summer’s warm weather lingered into most of September, creates ongoing challenges for several companies.
“While the warm September in the eastern part of the U.S. prolonged our oft too short summer, it did little to spur sales of fall merchandise,” Lyon wrote. “In fact, according to our channel checks and discussions with our industry contacts, sandals continued to sell well throughout the month — a key indicator that fall did not break early.”
Lyon added that “fashion-driven companies” such as Steve Madden Ltd. are less exposed to weather-related risk.
But a few others, namely Deckers Brands and Columbia Sportswear Co., are more weather sensitive, Lyon said.
Deckers, added Lyon, has already made some changes to its product offerings that may counter the weather woes.
“Deckers has shifted its assortment toward more weatherproof fashion and away from the core classic Uggs, while Columbia Sportswear’s assortment remains highly weather sensitive,” Lyon wrote on Oct. 6.
VF Corp. and its North Face brand could be another source of concern during the unseasonably warmer fall, in many parts of the country, but analysts said other offerings in the company’s diverse portfolio could compensate for potential lags in fall and winter spending.
