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Harvey, Irma hit hard

Reuters
Thursday, September 14, 2017

INDUSTRY-WIDE retail sales in August and September will fall in the wake of hurricanes Harvey and Irma, with apparel retailers such as Gap Inc (GPS.N) expected to take a longer-term hit than restaurant operators including Starbucks Corp (SBUX.O).

US same-store sales at apparel chains are expected to rise just 0.1 per cent in the third quarter ending October, compared with a 0.6 per cent increase seen before the hurricanes, according to Thomson Reuters data.

The two high-intensity hurricanes, which made landfall in the US over the past two weeks, have killed dozens and damaged thousands of homes in Texas and Florida.

As residents in these states begin to rebuild houses, home improvement chains including Home Depot Inc (HD.N) are well positioned to benefit.

But some retailers are not as fortunate.

Dunkin' Donuts (DNKN.O) could lose about $US17 million ($F34m) in sales if all its stores in the storm-ravaged states of Florida and Texas are shut for a week, according to Cowen & Co. That would amount to a little more than 10 per cent of the chain's quarterly US sales.

Bojangles Inc (BOJA.O), known for its Southern-styled recipes, could see a big drop in sales, according to Canaccord Genuity analyst Lynne Collier.

More than 80 per cent of the company's restaurants are in the storm-hit areas.

In contrast, Starbucks, with about 3 per cent store exposure to Texas and 5.6 per cent to Florida, could lose about $US35m ($F70m) in sales per week if all stores in those states were closed, Cowen said.

That is less than 1 per cent of the company's quarterly sales.

Overall, Hurricane Harvey had a muted 40 basis point negative impact on industry same-restaurant sales in August, according to data research firm MillerPulse.








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