Citibank August retail foot traffic report: Continued growth expected for RH (RH.US) and other companies, with BJ's Wholesale Club Holdings, Inc. (BJ.US) facing a bigger year-on-year challenge.

Citibank released a research report, commenting on the August customer traffic data of the retail companies it rated. The bank pointed out that according to Placer store customer traffic data, the average growth of the rated companies by Citibank in August was 2.0%. This growth rate has slowed down from 3.3% in July, but the two-year cumulative growth rate has remained basically unchanged, with August at +5.9% and July at +5.8%. The one-year growth rate in August is lower than the trend of the previous 12 months at +2.8%. In terms of absolute growth, Ollie's Bargain Outlet, Boot Barn, and RH had the highest increases, while Advance Auto Parts had the largest decline. Compared to July, most companies saw a slowdown in growth in August, except for Best Buy Co., Inc., RH, Costco, and BJ's Wholesale Club Holdings, Inc. Looking ahead to September, the one-year comparison for the rated companies by Citibank will become slightly easier. However, BJ's Wholesale Club Holdings, Inc. will face a tougher comparison, while Advance Auto Parts, Boot Barn, and RH will see relatively easier comparisons. Among the 16 retail companies rated by Citibank, including Advance Auto Parts(AAP.US), AutoZone, Inc.(AZO.US), Best Buy Co., Inc.(BBY.US), BJ's Wholesale Club Holdings, Inc.(BJ.US), Boot Barn(BOOT.US), Costco(COST.US), Floor & Decor(FND.US), Home Depot, Inc.(HD.US), Lowe's Companies, Inc.(LOW.US), Ollie's Bargain Outlet(OLLI.US), O'Reilly(ORLY.US), RH(RH.US), Tractor Supply Company(TSCO.US), Valvoline, Inc.(VVV.US), Petco Health and Wellness(WOOF.US), and Williams-Sonoma(WSM.US). Key Point 1: August customer traffic increased by 2.0%, slowing down from July Among the 16 retail companies rated by Citibank, the average store customer traffic in August increased by 2.0%. Compared to July, store customer traffic saw a slight slowdown (down 129 basis points), but the two-year cumulative data were relatively close (August +5.9% compared to July +5.8%). Within the Citibank-rated range, August growth was below the 12-month average of +2.8%. Key Point 2: Absolute growth led by Ollie's Bargain Outlet, Boot Barn, and RH Ollie's Bargain Outlet achieved the largest absolute growth within the Citibank-rated range, with a growth rate of +19.8%, followed by Boot Barn and RH, at +10.9% and +5.9% respectively. Since March, Ollie's Bargain Outlet has consistently had the highest customer traffic growth within Citibank's rating range, and among the Citibank-rated companies in August, its two-year cumulative data has been the strongest so far. Advance Auto Parts experienced the largest decline within the 1-year period at -7.9%, followed by Williams-Sonoma at -6.9% and Lowe's Companies, Inc. at -3.2%. Key Point 3: Best Buy Co., Inc., RH, Costco, and BJ's Wholesale Club Holdings, Inc. saw month-over-month growth Best Buy Co., Inc. (+120 basis points) had the fastest growth within the Citibank-rated range, followed by RH (+62 basis points). Despite maintaining a +20% absolute growth, Ollie's Bargain Outlet still experienced the largest deceleration (-450 basis points), followed by Tractor Supply Company (-436 basis points). Categorized, consumer electronics (Best Buy Co., Inc.) and warehouse clubs (BJ's Wholesale Club Holdings, Inc., Costco) showed the largest continuous improvement in performance, while the performance of the automotive parts retail industry (AutoZone, Inc., O'Reilly, Advance Auto Parts, Valvoline, Inc.) all declined compared to July. In the home improvement sector, Lowe's Companies, Inc. saw a greater decline in customer traffic in August than Home Depot, Inc. Key Point 4: September performance comparisons are generally slightly easier than August Looking ahead to September, the performance comparisons for the companies within Citibanks rated range will generally be slightly easier, except for BJ's Wholesale Club Holdings, Inc., which will face a more challenging comparison as its business benefited from last October's strike at East Coast ports. On average, the difficulty of base comparisons will decrease by 21 basis points, with Advance Auto Parts, Boot Barn, and RH benefiting the most from base comparison effects.