April Retail Comp Sales: Worst in 2 Years

New York—After better-than-expected comparable store sales results in February and March, April disappointed. In fact, comparable store sales were the worst since November 2009.

Today’s April results even missed analysts’ average estimate for a conservative 1.5% increase. In its tally of 20 retailers, Thomson Reuters found sales increased a mere 0.8% sales increase in April. About 53% of retailers missed expectations.

Of 22 retailers tracked by the International Council of Shopping Centers (ICSC), the average comparable store increase in April was 0.6%.

“The economy is growing in fits and starts, and we are seeing sales shoot up and down,” said Michael P. Niemira, ICSC’s chief economist. “We’re in a choppy period.”

Strong Comparisons, Late Easter Didn’t Help

Granted, retailers were facing several obstacles to higher sales. For one, retailers faced tough comparisons to April 2011, when sales jumped 8.7%. Easter was also earlier this year, which very likely pushed many sales into March. And Mother’s Day falls later this year. Sales of apparel were down at some retailers, likely due to shoppers buying warm weather clothing earlier in March when the weather was unseasonably warm.

“Early results show there was a sequential slowdown from a particularly strong February and March,” said Ken Perkins, president of Retail Metrics LLC, a research firm. “Weather cooled and consumer took a bit of a breather. But spending is still decent.”

Most of the retailers reporting today posted modest sales increases among them: Limited Brands, Target, TJX, Ross Stores, Nordstrom, Saks, and Macy’s. Sales were down, however, at Kohl’s, Gap, and Wet Seal.

Furthermore, only a few retailers beat expectations, such as Limited Brands, TJX, Ross Stores, Zumiez, Buckle Inc. and Nordstrom.

Due to the differences in spring holiday year to year and how they affect sales, many retailers combine their March and April figures in order to get a more realistic view of sales trends. Others say May sales may be a better indicator of trends.

According to Thomson Reuters, when the two months are combined, retailers came out with a slightly better 2.5% increase.

While some major retailers, including Walmart, Sears, JCPenney and Dillard’s, no longer report monthly comparable store sales, economists say tracking these sales figures helps to provide a barometer of what’s going on with consumer spending, which accounts for some 70% of the U.S. economy.

Among the retailers reporting April sales, and some first quarter sales results, are:

●Macy’s Inc. said its April comparable store sales rose 1.2% missing analysts’ average estimate for a 1.9% increase. Total sales increased 0.4% to $1.93 billion

For its first quarter, Macy’s said sales were up 4.4% to $6.15 billion, ahead of analysts’ consensus for $6.13 billion. Online sales during the quarter grew 33.7%.

“Our business at Macy’s and Bloomingdale’s continues to perform very well and sales in April met our expectations,” said Terry Lundgren, chairman/ceo.

●Kohl’s said its comparable store sales for April fell 3.5% compared with a 10.2% increase a year ago. The April figure was worse than the 1% decreased analysts’ average projected. Total sales decreased 1.9% to $1.25 billion.

For the quarter and year-to-date period, total sales increased 1.9% while comparable store sales increased 0.2%.

“As expected, warm March weather and an early Easter, contributed to a decline in April’s sales,” said Kevin Mansell, chairman/president/ceo. “Home, accessories and men’s all reported positive comparable store sales. From a regional perspective, the Midwest, Northeast, South Central and West outperformed the Mid-Atlantic and Southeast regions.”

A downturn in the sale of women’s apparel, which accounts for about 31% of all Kohl’s merchandise, was a leading factor in the sales miss.

●Nordstrom Inc. said Thursday its April comparable store sales increased 7%, ahead of the 5.8% increase that analysts’ average estimate had expected. Total sales increased 10.5% to $802 million.

For the first quarter, Nordstrom’s comparable store sales increased 8.5%. Preliminary first quarter total retail sales were up 13.7% to $2.53 billion.

●Saks Inc. said its April comparable store sales increased 2.0% but still fell behind analysts’ average estimate for a 4.0% increase. Total sales were up 0.9% to $259.5 million.

Best performing categories included women’s contemporary and Wear Now apparel, dresses, footwear, handbags and men’s accessories, shoes, and contemporary apparel.

Saks noted that its excluded sales of cosmetics and fragrances from its Friends & Family sales event since they were offered at a 10% discount in April. Had those figures been includes, Saks said its comparable store sales would have been in the mid-single digits.

For the first quarter, total owned sales were up to $743.9 million, up from $713.7 million for the prior year quarter. Comparable store sales increased 4.8%.

●Bon-Ton Stores said its comp sales in April fell 5%, which Brendan Hoffman, president/ceo, said failed to meet the company’s expectations. Total sales decreased 5.3% to $187.2 million.

Best performing categories were hard and soft home, fine jewelry, shoes, cosmetics and accessories. Women’s ready-to-wear  and men’s did not perform well, the company said.

While Bon-Ton moved its Community Day event from the end of February 2011 to the end of April this year, a move which helped improve sales, Hoffman said but the overall impact on April sales from the shift and other adjustments made to the retailer’s promotional calendar was “disappointing.”

●Stage Stores Inc. said its April comparable store sales edged down 1%. Total revenue rose 2% to $121 million.

Best performing categories were strongest categories were cosmetics, home & gifts, juniors, misses sportswear and petites. Sales improved in the Mid Atlantic, Midwest, Northeast, South Central and Southwest regions.

Stage Stores said its first quarter comparable store sales rose 2.5% Total revenue gained 5.5% to $366 million.

Michael Glazer, president/ceo, said the April performance was better than expected since the company might lose sales due to an earlier Easter and its move of a Mother’s Day sales to May from April last year.

Stage Stores named Glazer, who had been interim president/ceo, as its permanent president and ceo on a permanent basis in April.

●Target reported its April comparable store sales increased 1.1%, missing analysts’ average estimate for a 2.8% increase. Total net sales increased 2.1% to $4.87 billion.

“We’re very pleased with Target’s strongest quarterly comparable-store sales performance in more than 6 years, which, as we’ve previously indicated, received an early-season boost from the combination of warm weather and an earlier Easter,” said Gregg Steinhafel, chairman/president/ceo.

●Gap Inc. posted a 2% decrease in its April comparable store sales compared with an 8% increase in April 2011. The decrease was greater than the 0.8% decreased that analysts’ average estimate expected. Total sales were flat at $1.15 billion.

By division, Gap North America had a 4% comparable store sales increase; Banana Republic had a comp store increase of 1%, and Old Navy posted a 6% drop in comp sales. The international division also had a 6% drop in comp sales.

For its first quarter, Gap Inc. said net sales increased 6% to $3.49 billion. Its first quarter comparable sales, which include the associated comparable online sales, were up 4% compared with a 3% decrease in the first quarter last year.

“We delivered a solid first quarter as spring product continued to do well across all brands,” said Glenn Murphy, chairman/ceo, said.

●Limited Brands reported a 6% increase in its April comparable store sales, beating analysts’ average estimate for a 4% increase. Total sales rose to $659 million from $683.2 million a year ago.

● Cato Corp. said its April comparable store sales decreased 6%. Total sales were down 3% to $84.9 million.

For its first quarter, Cato said total sales were up 1% to $272.8 million. Comparable store sales during the quarter fell 2%.

Noting how the shift in Easter hit sales, John Cato, chairman/president/ceo, said: “April sales and the combined sales for March and April were in line with expectations.”

●Wet Seal Inc. saw its April comparable store sales slide down 9.6%, even more than a 9% drop that analysts’ average estimate expected. Total revenue fell nearly 8% to $42.7 million.

By retail division, Wet Seal stores had a 9.1% drop in comp sales while Arden B. had an 11.4% drop.

While the company said that dresses, footwear, jeans and other bottoms performed well, tops and jewelry were weaker at Wet Seal Stores. At Arden B, tops, dresses and accessory sales all fell.

For its first quarter, comparable store sales fell 7.7%. Total sales fell 5% to $147.9 million, missing the $149.5 million in sales analysts’ expected.

Susan McGalla, ceo, said: “The first quarter ended with April sales within our range of expectations.”

“E-commerce trends improved versus earlier in the quarter, with a 10% decline in April compared to a 14% increase for the prior year month,” McGalla said. “For the first quarter, e-commerce sales declined 17% versus growth of 13% in the prior year quarter, as we continue strategic efforts to transition to a higher penetration of full-price selling online and better align merchandising in this channel with our stores.”

●Hot Topic Inc. reported Wednesday that its first quarter sales grew 6.4%. Total sales for the quarter rose 6.4% to $171.6 million, beating analysts’ expectations for $168.78 million in sales. Total comparable store sales increased 7.5%.

“Our Hot Topic comps for Q1 were led by the improvement in fashion apparel, which validates our strategic direction. The positive comps at Torrid were on plan against a strong performance last year,” said Lisa Harper, ceo.

●Buckle Inc.’s comparable store sales in April edged up 1%, easing past analysts’ average estimate for a 0.9% rise. Total revenue sales rose 3.2 % to $71.6 million.

For the year-to-date, comp store sales rose 7.4% and total revenue increased 9.9% to $263.8 million.

●Zumiez reported another monthly comp sales increase that beat expectations. The skate, surf and board inspired retailer said April comp sales rose 10.1%, ahead of the 6.8% rise analysts’ average estimate expected. Total sales rose 20% to $38.4 million.

●Ross Stores beat analysts’ average estimate for its April comparable stores sales. The off price retailer had a 7% increase on top of a 10% increase a year ago while analysts’ estimated a 4% increase. Total sales rose 11% to $725 million.

For its first quarter, sales rose 14% to $2.357 billion. Comparable store sales for the quarter grew 9%.

“We are pleased with our April and first quarter sales which were well ahead of expectations,” said Michael Balmuth, vice chairman, ceo. “Our continued ability to deliver a wide array of name brand bargains to today’s value-focused consumers drove broad-based merchandise and geographic gains in both periods.”

●Stein Mart said its April comparable store sales edged down 1.6% due to weak sales in some categories and in the Southeast and Florida. Nonetheless, the retailer’s decrease was less than the 2.1% drop analysts’ expected. Total sales also edged down nearly 1% to $95.2 million.

For the combined March and April selling seasons, Stein Mart reported that linens, women’s clothing, petite clothing and men’s furnishings were the strongest categories, while women’s plus-size sportswear, gifts, dresses and underwear were weaker.

Strong results in the Midwest and the Northeast were offset by weaker sales in the Southeast and Florida.

For its first quarter, Stein Mart said comparable store sales fell 0.4% while total sales were nearly flat at $303.4 million, barely missing analysts’ average for sales of $304.5 million.

●TJX Cos., which operates Marshalls, T.J. Maxx and HomeGoods, beat forecasts for its April comparable store sales. The off-price retailer said its sales comp rose 6%, ahead of the 4% analysts forecast. Total revenue climbed 7% to $1.8 billion.

For its fiscal year to date, TJX said comparable store sales increased 8% and total revenue rose 11% to $5.8 billion.

“Comp sales were once again driven by significant increases in customer traffic, which reindicates that our values and offerings of current fashions and great brands are attracting and resonating with consumers,” said Carol Meyrowitz, ceo. “With above-plan sales in April and strong flow-through to the bottom line, we now expect first quarter earnings per share to be approximately $.54 and full year fiscal 2013 EPS to be in the range of $2.26 to $2.36, both of which are above our recently raised guidance and up substantially over last year.”

●Costco reported its April comparable store sales rose 4%, missing the 5.1% increase that analysts’ average estimate expected. Its U.S. stores posted a 4% increase in comp sales while its international stores had a 3% increase.

Excluding gasoline prices and unfavorable foreign currency exchanges, Costco’s comp store sales still rose 4% domestically and increased 7% internationally. For the total company, the comps rose 5%. Total revenue rose 7% to $7.25 billion.

 

 

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