New York—While bad weather, rising gasoline prices and a later Easter lead retail analysts to forecast March retail sales would probably decline for the first time since 2009. Instead, consumers continued to loosen their purse strings and spend, creating a small in sales compared with March 2010.
According to Thomas Reuters’ tally of 25 major retail chains, March sales increased 1.7% better than the 0.7% decline that retail analysts had expected.
“This gain, in the face of somewhat adverse factors, was encouraging and reflected a solid underlying trend in consumer demand,” said Michael Niemira, chief economist of the International Council of Shopping Centers (ICSC).
Pent Up Demand Spurs Sales
American consumers, whose purchases account for about 70% of the U.S. economy, withstood a 7.2% surge in gasoline prices as they bought apparel, accessories and other luxurygoods. Some have more to spend after the jobless rate fell to a two-year low last month, helped by employment in business services and health care.
“The momentum continues to build here, and as long as the jobs picture improves, retailers will be in good shape through June,” said Ken Perkins, president of Retail Metrics.” Neither the lack of the Easter Bunny, nor cool temperatures nor spiking gas prices could keep consumers at bay. There is still a significant amount of pent-up demand.”
Of the retailers reporting their March figures so far today, more than 80% beat expectations. Top performers included: Limited Brands, parent company of Victoria’s Secret and Bath & Body Works, posted a 14% increase; Costco Wholesale Corp. said sales rose 13%, Saks Inc. reported an 11.1% rise and teen retailer Zumiez Inc. saw an 8.9% gain.
Weaker performers included Gap Inc., which reported a 10% drop; Kohl’s Corp., with a 6.5% decline; and Target Corp., down 5.5%.
Results are based on sales at stores open at least a year, known as same-store or comparable store sales, and are considered an important measure of a retailer’s health because it excludes the effect of store openings and closings.
On Wednesday, MasterCard Advisors’ SpendingPulse said sales growth slowed in some categories last month. However, sales picked up in apparel and most other categories from electronics to luxurygoods than they did in March 2010.
SpendingPulse economist Michael McNamara says online sales grew even faster than usual in March because shoppers were trying to save on gas. SpendingPulse figures include spending in all forms including cash.
Among the retailers reporting their March sales were:
•Macy’s posted a 0.9% gain in March same-store sales after analysts’ estimates had projected a decline of 3.6%. Total sales were $2.207 billion, up 1.6% from $2.172 billion in the prior year period.
For the year to date, Macy’s, Inc.’s same-store sales were up 3%. Sales for the period totaled $3.969 billion, up 3.4% from $3.839 billion in last year period. Online sales were up 34.8% in March and 33% year-to-date. Further, the company forecast April same-store sales to be up by 8% to 9%, which would translate to an increase of 4% to 4.5% for the combined March-April period.
•JCPenney posted same-store sales for March had dropped 0.3% while total sales decreased 4.0% for the month. Online sales through jcp.com, however, rose 7.6% over last year. According to the company, sales during the last week of the month were negatively impacted by the shift of Easter out of the March reporting period this year, as it has expected. Top sellers in women’s apparel, fine jewelry and women’s accessories.
•Kohl’s reported its comparable store sales in decreased 6.5% in March, affected by the shift of Easter holidays, which resulted in pre-Easter sales pushed to April. Total sales also decreased 4.9% to $1.72 billion from $1.81 billion in the prior year. Children’s and footwear, two departments most sensitive to the Easter shift, had the highest decrease in comparable sales. Meanwhile, the Southeast and South Central regions reported the strongest comparable sales results for the month.
•Dillard’s Inc. said March merchandise sales were down 1% both in total sales and same-store sales basis. The department store said March sales reached $519.8 million compared to $526.8 million in 2010. March sales results were “negatively impacted” by Easter shopping activity moving from March to April. Dillard’s said it would provide combined March and April sales results on May 5.
•Nordstrom reported March comparable store sales 5.1%. Total retail sales were $897 million, up 10.1% from $815 million in the same period last year. Quarter-to-date same-store sales increased 6% from last year. Total retail sales were $1.50 billion, up 11% from $1.35 billion in the same period a year ago.
•Neiman Marcus said its March comparable-store March sales were up 8.8% from a year ago, with gains coming from both traditional stores and online. Sales trends were strongest in the Midwest, Southeast and Texas. Online sales continued their post-holiday rebound, increasing by 17% over March 2010. Top-selling categories online were women’s fine apparel, handbags, shoes and men’s apparel.
The stores division, which includes Neiman Marcus, Bergdorf Goodman and Last Call, posted a 7% increase comparable store sales. Top selling categories in stores were women’s fine apparel, designer handbags, shoes and precious jewelry, the company said.
•Saks Inc. reported March same-store sales increased 11.1%. Total sales were $260.2 million, a 9% increase over $238.2 million in March 2010.
On a quarter-to-date basis total sales were up 11.3% to $456.3 million compared to $410.0 million in March 2010. For March, the strongest categories at Saks Fifth Avenue stores included women’s designer collections and contemporary Dillard’s reported March same-store sales of -1.0% versus the -3.8% Street consensus.
•Bon-Ton Stores reported comparable store sales decreased 6.1%. Total sales decreased 6.6% to $254.5 million, compared with $272.4 million for the prior year period. Year-to-date comparable store sales decreased 3.7%. Year-to-date total sales decreased 4.3% to $452.2 million compared with $472.3 million for the same period last year.
Tony Buccina, vice chairman and president, merchandising said, “best performing businesses were home categories, including furniture, cosmetics and fine jewelry, and the momentum in our eCommerce business remained strong. We experienced especially robust sales performances in We experienced especially robust sales performances in watches, swimwear and luggage. We believe the combination of the shift of the Easter holiday sales as well as the arrival of more seasonable weather will result in a strong sales performance in April. “
•Target Corp. reported total sales dropped 4.5% in March to $5.95 billion compared to last year. Same-store sale fared even worse, falling 5.5%. March’s results were in line with expectations, Gregg Steinhafel, ceo, said in a statement.” Our stores are well prepared for the upcoming Easter season, and we continue to expect a mid-teens increase in Target’s April comparable-store sales.”
•Gap Inc. reported a 10% decrease in March comparable sales, compared to an 11% increase in March 2010. Net sales for the period were $1.33 billion, compared to $1.45 billion in March last year. “Our overall March performance was impacted by the tragic events in Japan, as well as the Easter shift into late April,” said Glenn Murphy, chairman/ceo.
Furthermore, the company said it anticipates that the tragic events in Japan would negatively impact its first quarter earnings per share by about $0.04. First quarter earnings per share is expected to be below the current mean first call consensus estimate of $0.44.
•Limited Brands Inc. posted a jump of 14% in comparable store sales ahead of the 1.5% increase that retail analysts had estimated. Net sales rose 16% to $863 million in the period. Same-store sales at its Victoria’s Secret division rose 19%, more than 10 times the rate predicted by estimates compiled by Retail Metrics Inc.
•Zumiez reported March same-store sales increased 8.9% from a year ago. March 2010 had been strong, too, with a same-store sales increase of 13.2%. Total sales climbed 15.1% to $41.2 million, compared with $35.8 million in March 2010.
•Bebe Stores, Inc. Thursday reported a 0.7% decrease in third quarter same store sales, compared to a decrease of 11.2% in the prior year period. Retail sales from continuing operations for the three month period ended April 2, was $100.8 million, down 0.5% from $101.3 million in last year quarter.
For the year-to-date period, comparable store sales decreased 1.8%, compared to a decrease of 20.8% in the prior year period. Total sales were $337.5 million, down 0.4% from $338.9 million in the same period last year.
•Wet Seal Inc. reported better than expected March sales led by its division for teen girls. Total sales were up 10.2% to $61.7 million. Same store sales rose 4.7% compared with a year ago. The company’s Wet Seal division, which sells apparel and accessories for teen girls, led the sales gain for the third month in a row with a 6.4% increase in same-store sales.
“At Wet Seal, business remained positive in nearly all categories,” Susan McGalla, ceo, said. Sales at the company’s Arden B. division, which sells clothes for young women, fell 4.6% last month. It was the first time Arden B. saw a decline in same-store sales since November when the company fell short on dresses, a staple item for the division.
•Buckle Inc. reported March comparable store sales increased 8.4% from the prior year period. The company also announced that effective February 1, 2012 Karen B. Rhoads, vice president of finance and CFO, will step down from her position.
•Ross Stores reported 2% growth in its March, but same store sales slipped slightly, falling 1%. A year ago, Ross had a 14 percent jump in same store sales in March as shoppers sought bargains in the down economy. Total sales were $828 million compared with sales of $811 million last year. The company said it expects same store sales will grow 4% to 55 in April.
•Cato Corp. reported March sales of $97.4 million, an 8% drop from $105.7 million for the corresponding period last year. Same-store sales fell 9%. The company said it March sales were hurt by the shift of Easter to April but expects April sales to benefit. First-quarter guidance is unchanged with earnings per diluted share put at 93 cents to 96 cents.
•Stage Stores’ same-store sales fell 5.3% in March, owing to a later Easter holiday this year, though the drop wasn’t as deep a 6.5% decline analysts’ average estimates expected. The retailer said same-stores sales were up in its cosmetics, junior’s and young men’s categories. Geographically, the Southeast and Southwest had same-store sales growth.
•Stein Mart reported total March sales of $127.1 million, a 4.9% decrease from $133.6 million for the same period the year before. Stein Mart reported a 3.9 decrease in comparable store sales for the same period.
•Hot Topic reported a 5% decrease in comparable store sales for March 2011. This compares to a 7.5% drop in March 2010. Comparable store sales for the month decreased 7.9% at Hot Topic division, while it increased 4.6% in Torrid stores. Total net sales fell 6.4% year over year to $61.6 million, hurt mainly by a 9.4% drops in sales at Hot Topic. Sales at Torrid grew 2.3% from last year to $16.9 million.
•Costco Wholesale Corp. said same store sales in March climbed 13% last month, handily beating analysts’ average estimate expecting a 7.4% increase. Removing rising gas prices and strengthening foreign currencies, sales at stores open at least a year climbed 8%. Total sales rose 17% to $8.33 billion.
For the year to date, same store sales increased 8%. This figure was up 5% when removing higher gas prices and strengthening foreign currencies. This figure was up 5 percent when removing higher gas prices and strengthening foreign currencies Total sales gained 12 percent to $50.79 billion for the 31-week period.
•BJ’s Wholesale reported that comparable club sales for March increased by 5.3% including a contribution from gasoline sales of 4%. Excluding the impact of gasoline, merchandise sales at comparable clubs increased by 1.3% The company said a calendar shift in the timing of Easter had a negative impact on club sales of 2%. Total sales increased by 9.1% to $1.08 billion last month from $992.7 million in March 2010.
•Tandy Leather Factory posted a 10% increase in its March same store sales. Total sales rose 7%, to $5.7 million. The company cautioned, however, that rising leather prices could reduce future sales. John Thompson, ceo, said the company will look for “unique buying opportunities” to offset the higher price of leather. Although we try to build cost increases into our selling prices, at some point, customer price resistance will come into play.”