UPDATE: April Same-Store Sales Show Softness By Large Retailers
03 May 2012 - 11:51PM
Dow Jones News
Big retailers delivered disappointing sales for April, with
Macy's Inc. (M), Target Corp. (TGT) and Saks Inc. (SKS) all falling
short of expectations that were set low to compensate for a lack of
Easter buying as the holiday fell early this year.
The early Easter set up a powerful showing in March that largely
didn't extend into April. Last month was also hit by colder weather
in its latter half and gasoline prices that ratcheted higher.
Retailers were also up against some big numbers from a year ago
because Easter fell much later in April. Still, "We knew Easter
would produce a strong March, and that was built into analysts'
expectations for April," said Barbara Kahn, professor of marketing
at the University of Pennsylvania's Wharton School. "The fact that
April's numbers have softness shows this is a rocky economic
recovery and people are still a bit cautious."
Still, one month doesn't make a trend, and it will take later
into the year to see just how cautious consumers are.
Macy's Inc. (M) reported a 1.2% rise in same-store sales when
1.9% was expected. The department store chain, which has a recent
track record of outdistancing projections, blamed the earlier
Easter, the shift of a cosmetics sale into March from April, and
Mother's Day falling later in May this year.
Target reported same-store sales rose 1.1% when 2.8% was
expected. Chief Executive Gregg Steinhafel nonetheless said
Target's "underlying sales trend remains quite healthy."
Costco's U.S. same-store sales excluding fuel rose 4%, when
analysts were expecting 4.9%, the second month in a row the mass
merchant missed projections. "While a slowing contribution from
(customer) traffic growth has been more than offset by average
transaction increases over the past year or so, that appears to
have reversed this quarter," said Robert Carroll, retail analyst at
UBS.
Gap Inc. (GPS) reported same-store sales fell 2%, when a 0.8%
decline was expected. Despite the miss, Chief Executive Glenn
Murphy said spring merchandise "continued to do well across all
brands."
April same-store sales rose 2.2% for the 18 retailers that
report figures, according to analysts polled by Thomson Reuters.
The 2.2% compares with 11.1% a year ago when Easter fell on April
24 and is beneath the range that retailers have been reporting so
far this year. For March and April combined, to show the shift of
the Easter holiday to early April this year, retailers reported a
4.5% gain. The growth is down from a 6.4% rise over the same two
months last year.
There were some standouts. Nordstrom Inc. (JWN) reported a rise
of 7.1% when 5.8% was projected. But fellow high-end retailer Saks
Inc. (SKS) posted a 2% rise in same-store sales, when 4% was
expected. Saks said it was hurt by excluding cosmetics and
fragrances from a large sale it holds in April.
Limited Brands Inc. (LTD), operator of Victoria's Secret and
Bath & Body Works, narrowed first-quarter guidance to the high
end of its projection after issuing April same-store sales that
beat expectations, coming in with a 6% gain, when a 4% rise was
predicted.
Off-price retailer TJX Cos. (TJX) posted a 6% rise in
comparable-store sales, when 4% was expected, and lifted its
first-quarter and full-year earnings view, citing significant
increases in customer traffic.
Among teen retailers, Zumiez Inc. (ZUMZ) reported a 10.1% rise
in same-store sales when 6.8% was expected. The gain came on top of
17.5% growth in April a year ago.
Wet Seal Inc. (WTSLA) posted a 9.6% drop in comparable-store
sales when a 9% decline was expected. And Buckle Inc. (BKE)
same-store sales gained 1%, when a 0.9 rise was projected.
Stage Stores Inc. (SSI) posted a 1% drop in same-store sales
when analyst were looking for a 4.8% decline. The department store
chain said it saw comparable-store sales increases in its
cosmetics, home and gifts, junior's, misses sportswear and petites
categories during the month.
Geographically, the Mid Atlantic, Midwest, Northeast, South
Central and Southwest regions all had comparable store sales
gains.
"We expected April to be challenging given the negative impact
of the Easter calendar shift and the timing shift of our Mother's
Day event to May this year from April last year," Stage Stores
Chief Executive Michael Glazer said. "However, April results were
better than anticipated and, as a result, we exceeded our
comparable store sales expectations for the quarter."
-By Karen Talley, Dow Jones Newswires; 212-416-2196;
karen.talley@dowjones.com
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