April Retail Sales Increase Better than Expected

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New York—While gas and food prices may be on the rise, a late Easter boosted retail sales results for April.

Of the 25 retailers tracked by Thomson Reuters comparable store sales—sales at stores open more than a year—were up 8.9% compared with April 2010. That’s even higher than what retail analysts’ average estimate had expected: an 8.4% increase.

Much of the increase could be attributed to strong sales at in apparel, discounters and some teen-oriented stores. Among the month’s strongest performers were Limited Brands, parent company of Victoria’s Secret and Bath & Body Works, which posted a 20% sales increase; teen chain Zumiez Inc., with a 17.5% gain; and Costco Wholesale Corp., up 12%.

Still Concerns Above Price Increases Due to Cotton, Labor

“Consumers showed resilience in April,” said Ken Perkins, president of Retail Metrics, a research company. “This tied March 2010 for the largest monthly gain on record over the past 11 years.”

Today’s retail sales echo a report on Wednesday from MasterCard Advisors’ SpendingPulse showing apparel sales rose more than 10% from April 2010, with particular strength in men’s clothing, which was up over 12%. Sales of women’s apparel rose more than 7%, the seventh straight month of growth and apparel’s highest year-over-year growth rate since May 2007. SpendingPulse data includes all forms of payment including cash.

“All apparel sectors were up from March, primarily because of Easter,” said Michael McNamara, vice president of research and analysis for MasterCard Advisors SpendingPulse.

Nonetheless, some analysts cautioned that the figures were somewhat erratic, with some major retailers missing expectations. Also, April figures were inflated due to the late Easter. Still, Perkins, said comparing March/April figures this year to March/April 2010, retail was still up 5%.

While Perkins said the overall sales figure was strong, “there was some bifurcation in the numbers, with 60% beating expectations and 40% missing.”

Retail analysts still fear that sales may shrink as fuel prices rises and retailers have to raise prices due to increased costs on things like cotton and labor. Not to mention the U.S. Department of Labor reported today that unemployment applications last week rose to the highest level in eight months.

Overall, “discretionary dollars for the most part seem to be holding up,” McNamara said. “But as you move down the price spectrum, you see more pressure because of gas prices.”

Among the store reporting April sales results today are:

Macy’s Inc. posted a 10.8% rise in comparable store sales, beating forecasts of an 8% to 9% increase. Total April sales rose 10.9% to $1.92 billion. Comparable store revenue for combined March/April rose 5.3%.

In the first quarter, same store revenue rose 5.4%, while total sales rose 5.7% to $5.89 billion. Macy’s online comparable sales rose 50.3% and 38.3% for the first quarter.

●JCPenney reported a 6.4% rise in same-store sales although analysts had expected an 8.5% rise. Women’s and children’s categories were the strongest, followed by the men’s group. Geographically, the Southeast was the strongest performer, and the company said bad weather hurt sales and traffic in several regions throughout the month.

Still the company still raised its first-quarter guidance based on its overall performance during the period. For the period ended April 30, the company expects earnings of about 24 cents a share, up from its prior view of 18 cents to 23 cents. Sales for the quarter edged up 0.4% to $3.94 billion, slightly behind analysts’ estimates for $3.98 billion.

●Kohl’s reported April comparable store sales increased 10.2%, missing analysts’ estimate expected a 15% increase. Total sales increased 12.1 percent to $1.28 billion.

Comparable store sales for the quarter are up 1.3%, and total sales are up 3.1% to $4.16 billion.

●Dillard’s reported same store sales increased 11% in April. Total sales increased 10% to $448.4 million compared to $406.3 million during the same period last year. Dillard’s also said sales for the combined March/April increased 4% on both a total and comparable store basis.

● Nordstrom Inc. said its April same store revenue rose 7.6% in April, helped by the late Easter. Nonetheless, the increase was less than the 8.1% that analysts had predicted. Children’s clothing, men’s clothing and men’s shoes performed best, the company said. Total sales rose 14% to $726 million.

●Saks Inc. reported April revenue at stores open at least a year increased 5.8% boosted by demand for handbags, women’s and men’s shoes, fragrances, men’s clothing and women’s contemporary and designer evening apparel.

Still results came in well below the 10.3% gain that analysts’ average estimates expected. Total revenue climbed 4.2% to $257.3 million. First-quarter revenue at stores open at least a year rose 10.2% with total sales up 8.7% to $713.7 million.

●Neiman Marcus Inc. said comparable store sales in Neiman Marcus and Bergdorf Goodman stores rose 8.3% in April, driven by strong demand for shoes, handbags and jewelry. Total revenue rose 8.5% to $330 million.

For the quarter, same store revenue rose 9.7% and total revenue rose 10% to $984 million. Revenue in stores open at least one year rose 9.7 percent. Geographically, stores in the Northeast and Southeast performed the best. Women’s sportswear, evening clothing, designer handbags, jewelry and men’s clothing were the strongest sellers, the company said.

● The Bon-Ton posted $197.7 million in total sales in April—a 4.6% increase over the prior-year period. However, the company also saw total sales fall 1.7% in its first quarter compared with the same period last year. Same store sales increased 5.1% in April but decreased 1.2% in its first quarter.

Stage Stores Inc. posted a 15.1% gain in April comparable sales, when 13.8% was projected. But the company cut its first quarter and full-year view based on earlier weakness and troublesome trends that it sees. “Our first quarter sales were disadvantaged by February’s storms and a disappointing Easter business,” Chief Executive Andy Hall said. “While April sales benefited from the Easter calendar shift [to later in the month], rising gas prices made for a more cautious consumer.”

Target Corp. posted a 13.1% rise in April same-store sales, just missing the 13.2% that analysts’ estimates expected.  Still it was a big improvement from a year ago, when Target’s sales fell 5.9%.The company said the results were somewhat below its own expectations as consumers were “very cautious” in their spending up until Easter. Gregg Steinhafel, ceo, added that consumers” face increasing pressure on their household budgets due to higher energy costs and increasing prices of food, apparel and home merchandise.”

● Gap Inc. showed an 8% gain in same-store sales, but issued a disappointing earnings outlook on “significantly down” merchandise margins. Gap now expects net income in the first quarter of 38 cents to 39 cents per share while analysts’ average estimate expected net income of 40 cents per share. Comparable store revenue at the Gap division rose 2%, rose 11% at Banana Republic, rose 14% at Old Navy and edged down 1% internationally. Total sales rose 10% to $1.15 billion from $1.05 billion last year.

Total first-quarter revenue fell 1% to $3.30 billion, from $3.33 billion last year. Analysts expected $3.27 billion. Same store revenue in the first quarter fell 3%.

Gap also said Gap said Patrick Robinson, the design director for its namesake brand, is leaving the company effective immediately.

● Limited Brands Inc. posted a 20% rise in its April same-store sales, when 12.2% gain had been expected. Total sales rose 13% to $2.22 billion from $1.93 billion in first quarter 2010 The company, which operates Victoria’s Secret, Henri Bendel, Bath & Body Works, also raised its first quarter guidance. Same-store sales at Victoria’s Secret jumped 19% and 11% at Bath & Body Works. La Senza, the company’s Canadian lingerie chain, recorded a 4% drop in same-shop receipts.

● Hot Topic Inc. ended a two-year string of monthly declines by reporting an 11% jump in same-store sales in April. Analysts’ average estimate expected only a 3.4% increase. Hot Topic also raised its full-year outlook, seeing breakeven results to a 2-cent loss, compared with the March forecast of a loss of 1 to 4 cents a share.

● Abercrombie & Fitch Co. posted a 10% gain in comparable-store sales for the quarter, with net sales soaring 22% to $836.7 million from $687.8 million a year earlier. International sales, a major focus for the company, were up 64% to $195.7 million. Same-store sales for each of Abercrombie’s three main divisions increased between 8 percent and 11%.

●The Buckle Inc. posted a 14.5% increase in its April same store sales, besting analysts’ average forecast for a 12.5% increase. Total April revenue rose 18.7% to $69.4 million. For the quarter, same store revenue rose 8.1%, while revenue rose 12% to $240.1 million.

● Zumiez Inc. posted sales growth that exceeded analysts’ expectations. It reported April same-store sales jumped 18%, topping analysts’ average forecast of 14%, and building on a 2.1% increase last year. Total net sales increased a 24.8% to $32 million from $25.7 million reported a year ago. The April results marked the 17th consecutive month of comparable store sales growth

● Cato Corp. raised its fiscal first-quarter earnings forecast as sales for the period topped its expectations. The company now forecasts $1 to $1.02 a share from its previous expectation of 93 cents to 96 cents a share. Sales during the quarter rose roughly 5% to $271.7 million and were up 2% on a same-store basis, the company said.  “First-quarter sales were above our expectations against a strong comparison in the prior year,” John Cato, chairman and ceo, said. Its April same-store sales rose 17%.  For March/April combined, same-store sales increased 1%.

● Stein Mart reported a 4.2% increase in comparable store sales in April. Total rose 3.3% to $96 million. But because the Easter holiday, Stein Mart also reported its combined sales for March/April. Total sales in that nine-week period fell 1.5% to $223.1 million and comparable store sales fell 0.6%

● Ross Stores Inc. said its April same store sales rose 10%, nearly double the 5.3% increase analysts’ average estimates expected. Total revenue rose 14% to $651 million.

For the quarter, same store rose 3% while total revenue rose 7% to $2.08 billion. Ross now expects first-quarter net income between of $1.47 or $1.48. Analysts previously had predicted $1.33 per share. Last month, Ross had forecast first-quarter net income would be “somewhat above” the high end of its projection of $1.27 per share to $1.32 per share.

● Costco Wholesale Corp. posted a 12% rise in April same-store sales, ahead of  analysts’ average expectations for 8.9%  In the United States, comparable increased 11% Removing the impact of higher gas prices and strengthening foreign currencies, same store revenue gained 7% in April. The U.S. recorded a 6% gain while international results climbed 10%. Costco operates gasoline stations at its sites and said higher fuel costs, as well as strength in foreign currencies, aided results.

●  BJ’s Wholesale Club Inc. reported  an 8.5% rise in its April comparable store sales,including a contribution from sales of gasoline of 4.4%. Excluding the impact of gasoline, merchandise comparable sales increased by approximately 4.1%. Total sales increased 12.2% to $871.7 million from $777.0 million in April 2010.

For the first quarter, net sales increased 10% to $2.77 billion and comparable store sales increased by 6.3%, including a contribution from sales of gasoline of 3.9%. Excluding the positive impact from sales of gasoline, merchandise comparable store sales increased by 2.4%.