UPDATE: Retailers Beating Estimates On Feb Same-Store Sales
05 March 2010 - 2:10AM
Dow Jones News
The recession appears to be thawing for retailers as one of the
worst Februarys weather-wise did not keep shoppers from stores and
allowed the best same-store sales showing in six months.
Comparable-store sales rose 4% when 2.9% was predicted for the
28 retailers that report through Thomson Reuters. The next best
month was January at 3.3%, and the positive showing marks half a
year of straight gains after 12 monthly declines as retailers were
caught off-guard by a consumer-led recession that began in December
2007.
"It's really looking good," said Erin Armendiger, managing
director of the Baker Retailing Initiavive at the Wharton School.
"Retailers like to blame the weather, but this time it really did
temper operations."
But while stores did close, especially in the Northeast, sales
were promising nonetheless, "which suggests we would have done even
better," Armendiger said.
Consumers especially hit the malls, with Macy's Inc. (M),
Dillard's Inc. (DDS), Abercrombie and Fitch Co. (ANF) and
Aeropostale Inc. (ARO) all beating projections.
With most retailers reporting, 82% beat expectations as they
kept Christmas inventories low, were able to clear items without
too much markdown and move spring merchandise in.
Gap Inc. (GPS) posted comparable-store sales of 3%, ahead of
Wall Street's projection. Gap's Old Navy stores reported North
American sales rose 6%. Employees at Old Navy on Thursday morning
were placing $5 and less banners for family springwear, hoping the
combination of pent up demand and very low prices will prove a draw
for summer.
While the consumer in general appears to be spending more at
stores, they are making less large ticket trips and were up against
easy year-ago comparisons.
More importantly, observers said, will be how March shapes up
because it is a longer month and will include this year more
spending related to Easter, which falls on April 4, earlier than
last year.
"A particularly soft March would not bode well for retailers
already grappling with high unemployment and a weak job market,"
said Ken Perkins, research analyst at RetailMetrics.
Nonetheless, February proved to be a healthy month for many
retailers. Surprisingly strong sales from teen retailer Zumiez Inc.
(ZUMZ), which reported same-store sales growth of 11% in February,
compared with Wall Street's projection of 1.2% growth and last
year's 13% slide.
In contrast, fellow teen retailer Hot Topic Inc. (HOTT) reported
a 7% decrease in same-store sales but still surpassed the average
Street estimate for a 13% decline.
Also strong was Limited Brands Inc. (LTD), which reported a 10%
increase in February same-store sales, benefiting from strong
Valentine's Day-related sales at its Victoria Secret division,
where same-store sales rose 10%. Limited's total sales rose to
$600.1 million from $547.8 million a year ago.
On the weak side was Destination Maternity Corp. (DEST), which
reported a 9.3% drop in February same-store sales, and apparel and
accessory store Stage Stores Inc. (SSI), which saw same-store sales
slide 3.9%.
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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