Consumers overcame some of their reluctance to shop in April, giving the nation's retailers sales that modestly beat expectations. Results again varied widely...
NEW YORK — Consumers overcame some of their reluctance to shop in April, giving the nation’s retailers sales that modestly beat expectations. Results again varied widely among merchants, reflecting shoppers’ uncertainty about the economy and their struggles with higher gasoline prices.
As stores released their monthly sales figures yesterday, Wal-Mart, the world’s largest retailer, and rival discounter Target turned in disappointing performances. But teen retailers, luxury stores and wholesale clubs had substantial sales gains. Other standouts included moderate-price department stores including J.C. Penney.
“The results were uneven, but there were clear pockets of strength,” said Michael Niemira, chief economist at the International Council of Shopping Centers.
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The International Council of Shopping Centers-UBS sales tally of 70 stores posted a 2.2 percent increase for the month, better than the 2 percent gain Niemira expected. The tally is based on same-store sales, which reflect business from stores open at least a year; they are considered the best indicator of a retailer’s health.
Several major retailers, including Federated Department Stores and J.C. Penney, raised their first-quarter earnings outlook yesterday based on stronger-than-expected business.
“Overall, it was a pretty solid report,” said Gint Rimas, a senior analyst at Thomson Financial. “Expectations were lower, but consumers are still out there shopping.”
Percentage change in April same-stores sales from the year-earlier period.
Retailer % chg.
Gap – 5.0
Source: Associated Press
The nation’s discounters, whose customers have been particularly hurt by high gas prices and job weakness, had another lackluster month. Wal-Mart had a 0.9 percent gain in same-store sales, slightly below the 1 percent consensus prediction of Wall Street analysts polled by Thomson Financial.
Wal-Mart did get a boost from Sam’s Club, which posted a 4.9 percent gain for the month. That compared with the company’s flagship discount stores, which had only a 0.1 percent increase.
Rival Target had a 1.3 percent gain, below analysts’ 2.3 percent forecast.
But Costco enjoyed a same-stores sales gain of 8 percent, surpassing the 6.7 percent analyst estimate. Ken Perkins, president of Retail Metrics, a research firm in Swampscott, Mass., noted that wholesale clubs have done well because they tend to appeal to a higher-end consumer who hasn’t been vulnerable to the economy’s fluctuations.
Gas prices have actually helped wholesale clubs, since many operate gas stations at their stores, he said.
Most midlevel department stores had a surprisingly solid performance. J.C. Penney had a 3.6 percent gain in department stores, above the 1.7 percent Wall Street forecast.
Federated posted a 2.8 percent increase, better than the 0.5 percent estimate.
Upscale department stores again enjoyed robust gains. Nordstrom had a 6.9 percent gain in same-store sales, above the 3.6 percent forecast. And Neiman Marcus had a 14.2 percent gain, beating the 6.2 percent estimate.
Apparel retailer Gap suffered a 5 percent decline in same-store sales, worse than the 2.4 percent forecast by Wall Street. The company lowered its first-quarter profit outlook as a result of heavy discounting of spring merchandise.
Limited Brands, which owns stores including Victoria’s Secret, also struggled, posting a 4 percent drop in same-store sales, worse than the 1 percent decline analysts predicted.
But teen retailer American Eagle Outfitters’ sales rose 20 percent, beating the 18.9 percent estimate.
Rival Abercrombie & Fitch had a 16 percent same-store gain, better than the 12.2 percent estimate.