Back-to-School Outlook Underwhelming

Reaffirming the negative trend most analysts have forecasted, Citi Investment Research on Monday released its own back-to-school estimates, pegging the same-store sales decline for the period to range from 3 percent to 4 percent.

“We expect another challenging b-t-s season,” Deborah Weinswig, leader of Citi’s Retailing and Broadlines sector, said during a conference call. “This is the first year since 1995 that we are projecting a decline in back-to-school spending.”

In a survey conducted by its retail analyst team, Citi said 45 percent of consumers could spend less during b-t-s than last year, up from 41 percent during the year-ago survey. Discount stores will be the “primary destination” for b-t-s shopping, said Weinswig, with 67 percent of consumer votes, while the department stores were preferred by only 18 percent of shoppers.

In addition, 70 percent consumers cited price most often as the main motivation for b-t-s shopping, up 5 percent since last year. Forty-eight percent surveyed plan to use more coupons or look for sale items, while 40 percent will seek out generic or private-label items.

J.C. Penney Co. is likely to be a winner in the broadlines sector, said Weinswig. “While discretionary spending will likely remain pressured, we believe the company will benefit from industry consolidation, new product launches in time for b-t-s and an improved value equation for [its private-label] American living line.”

In the athletic and sporting goods sector, Citi’s footwear and apparel analyst, Kate McShane, pointed to “worsening trends in unemployment and lower levels of dispensable income year-over-year.”

McShane is targeting Foot Locker Inc. as the strongest performer in the sporting-goods segment for b-t-s, because it will “benefit from customers looking for value.”

“The footwear category has held up better than other retail categories,” she explained. “We think the footwear brands Foot Locker carries, and the broad array of price points it offers, could result in better-than-expected same-store sales for b-t-s.”

John Legend wearing Sperry boat shoes Sponsored By Sperry

It’s Boat Shoe Summer – Just ask John Legend

Celebrate Father's Day with the shoe of the summer: Sperry boat shoes, curated by John Legend.
Learn More

Access exclusive content