Retailers’ Sales Modestly Beat Expectations in April
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Consumers overcame some of their reluctance to shop in April, giving the nation’s retailers sales that modestly beat expectations. Results again varied widely among merchants, reflecting shoppers’ uncertainty about the economy and struggles with higher gasoline prices.
As stores began to report their sales results yesterday, Wal-Mart Stores, the world’s largest retailer, and rival discounter Target turned in disappointing performances. But teen retailers and wholesale clubs had substantial sales gains. Another standout was J.C. Penney, which reported results that beat estimates.
“The results were uneven, but there were clear pockets of strength,” said Michael Niemira, chief economist at the International Council of Shopping Centers.
The International Council of Shopping Centers-UBS preliminary sales tally of 60 stores posted a 2.5% increase for the month, better than the 2% gain that was expected. The tally is based on same-store sales, which are sales at stores opened at least a year; they are considered the best indicator of a retailer’s health.
The April results, while uneven, did raise hopes that consumers might spend a little more freely in the months ahead. Consumers are very concerned about the economy, according to measures of consumer confidence that have fallen for three straight months, and they’ve had to factor higher gasoline prices and interest rates into their budgets. Meanwhile, the job market is still uncertain.
The nation’s discounters, whose customers have been particularly hurt by high gas prices, had another lackluster month.
Wal-Mart had a 0.9% gain in sales at stores that had been open at least a year, slightly below the 1.0% gain from the consensus of Wall Street analysts polled by Thomson Financial. Total sales rose 7.4%.
But Wal-Mart did get a boost from Sam’s Club, which posted a 4.9% gain for the month. That compared with the company’s flagship discount stores, which had only a 0.1% increase.
Rival Target had a 1.3% gain, below the 2.3% Wall Street forecast. Total sales rose 7.7%.
Costco Wholesale enjoyed a same stores sales gain of 8%, surpassing analysts’ estimate of 6.7%. Total sales rose 11%.
BJ’s Wholesale Club had an 8.4% gain, outpacing the 4.1% Wall Street forecast. Total sales rose 12.5%.
Wholesale clubs have done well because they tend to appeal to a higher end consumer, who hasn’t been vulnerable to the economy’s fluctuations. Meanwhile, Penney had a 3.6% gain in department stores, outpacing the 1.7% Wall Street forecast. Total department store sales rose 4.7%.
Federated Department Stores posted a 2.8 % increase, better than the 0.5% estimate. Total sales rose 2.6%. Upscale department stores continued to post strong gains. Nordstrom had a 6.9% gain in same-store sales, above the 3.6% forecast. Total sales rose 8.1%.
Neiman Marcus Group had a 14.2% gain, beating the 6.2% estimate. Total sales rose 13.3%.
Apparel retailer Talbots enjoyed a 7.1% gain, far surpassing its 2.3% forecast. Total sales rose 11%.
Teen retailer American Eagle Outfitters rose 20%, beating the 18.9% estimate. Total sales rose 30.2%.
Limited Brands, which owns stores including Victoria’s Secret, had a 4% drop in same-store sales, worse than the 1% decline analysts predicted. Total sales rose 1.8% for the month.