Retailers posted modestly higher sales in April as warmer
temperatures and a later Easter holiday helped push shoppers into
stores.
Thursday's results marked the second consecutive month that
same-store sales--an industry metric that gauges sales at stores
open at least a year--have topped expectations.
Only regional discounter Fred's Inc. posted lower sales and
missed estimates of the seven retailers tracked by Thomson Reuters
that have reported monthly metrics so far.
But given the shifting Easter holiday, John Tomlinson, managing
director and head of retail at ITG Investment Research Inc., said
May will likely give the first clear read on most retail
trends.
Several industry watchers had forecast a pickup in spring
shopping amid pent-up demand following a harsh winter season. And
results from March and April are generally viewed together because
of the shifting nature of Easter, which fell about three weeks
later this year and moved into April from March last year.
Consumers continued to spend on big-ticket items as well in
April, as car buyers shrugged off concerns about the tepid economy
and streamed into U.S. auto dealerships, helping most car makers to
post higher new-vehicle sales.
Overall, the seven retailers tracked by Thomson Reuters posted a
4.6% increase in April same-store sales, with Gap Inc. expected to
report after the market closes. Thomson Reuters projects the eight
companies to record 2.8% growth versus a 4.3% increase a year
earlier.
For the two-month period, retailers reported 3.4% growth, down
from 3.5% a year earlier.
Many retailers, including the major department stores and most
big-box retailers, stopped reporting monthly sales data some time
ago, making it difficult to get a snapshot of the entire industry.
However, many retailers will be releasing their quarterly results
and outlooks in the next few weeks, which should help give a
clearer picture of the health of the sector.
L Brands Inc., formerly Limited Brands, said same-store sales
rose 8% last month, beating consensus estimates for a 4.3%
increase, as the company said the later Easter holiday benefited
results. The company also boosted its quarterly earnings outlook
and noted that lower promotional activity helped boost margins at
some of its brands.
By brand, Victoria's Secret reported an 8% increase in sales,
topping expectations for 4.7% growth, while Bath & Body Works'
same-store sales improved 8% when a 3.3% increase was expected.
Costco Wholesale Corp. reported a 5% increase in April
same-store sales, excluding gasoline, exceeding estimates for 3.2%
growth. Unlike some of its peers, Costco's results were hurt by the
later Easter holiday since it led to one less selling day in the
month.
Top performing categories at Costco included automotive, tires,
hardware, apparel, housewares and jewelry, though some of this
strength was offset by weaker performance for the office category.
The company also said same-store sales for consumer electronics
were slightly negative for the month.
Among teen retailers, Zumiez Inc. reported an 8.2% jump, handily
topping expectations for a 0.5% increase. Buckle Inc., meanwhile,
reported a 0.8% sales increase, while analysts had expected a 0.2%
decline.
Off-price retailer Stein Mart Inc. called out warmer weather as
it said same-store sales rose 8.9% in April, when 4.5% growth was
expected.
Meanwhile, Fred's said same-store sales fell 2.3%, missing
expectations for 2% growth, and the discount retailer cut its
quarterly sales and profit outlook. Strength in the company's
pharmacy department, was offset by a sales shortfall in other
general merchandise departments, Chief Executive Bruce Efird
said.
The company said it expects same-store sales to begin growing
again in June and said it is working to implement a new marketing
strategy.
Write to Anna Prior at anna.prior@wsj.com
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