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April Same-Store Sales Show Softness By Large Retailers

05/03/2012 | 10:37am US/Eastern

--Macy's, Target and Saks all disappoint

--Limited, Nordstrom are standouts

--Reports raise concerns about consumer spending

(Updates throughout with sales reports from more retailers

   By Karen Talley 
   Of  
 

Big retailers delivered disappointing sales for April, with Macy's Inc. (>> Macy's, Inc.), Target Corp. (>> Target Corporation) and Saks Inc. (>> Saks Inc) all falling short of expectations that were set low to compensate for a lack of Easter buying as the holiday fell early this year.

The early Easter set up a powerful showing in March that largely didn't extend into April. Last month was also hit by colder weather in its latter half and gasoline prices that ratcheted higher.

Retailers were also up against some big numbers from a year ago because Easter fell much later in April. Still, "We knew Easter would produce a strong March, and that was built into analysts' expectations for April," said Barbara Kahn, professor of marketing at the University of Pennsylvania's Wharton School. "The fact that April's numbers have softness shows this is a rocky economic recovery and people are still a bit cautious."

Still, one month doesn't make a trend, and it will take later into the year to see just how cautious consumers are.

Macy's Inc. (>> Macy's, Inc.) reported a 1.2% rise in same-store sales when 1.9% was expected. The department store chain, which has a recent track record of outdistancing projections, blamed the earlier Easter, the shift of a cosmetics sale into March from April, and Mother's Day falling later in May this year.

Target reported same-store sales rose 1.1% when 2.8% was expected. Chief Executive Gregg Steinhafel nonetheless said Target's "underlying sales trend remains quite healthy."

Costco's U.S. same-store sales excluding fuel rose 4%, when analysts were expecting 4.9%, the second month in a row the mass merchant missed projections. "While a slowing contribution from (customer) traffic growth has been more than offset by average transaction increases over the past year or so, that appears to have reversed this quarter," said Robert Carroll, retail analyst at UBS.

Gap Inc. (>> The Gap Inc.) reported same-store sales fell 2%, when a 0.8% decline was expected. Despite the miss, Chief Executive Glenn Murphy said spring merchandise "continued to do well across all brands."

April same-store sales rose 2.2% for the 18 retailers that report figures, according to analysts polled by Thomson Reuters. The 2.2% compares with 11.1% a year ago when Easter fell on April 24 and is beneath the range that retailers have been reporting so far this year. For March and April combined, to show the shift of the Easter holiday to early April this year, retailers reported a 4.5% gain. The growth is down from a 6.4% rise over the same two months last year.

There were some standouts. Nordstrom Inc. (>> Nordstrom, Inc.) reported a rise of 7.1% when 5.8% was projected. But fellow high-end retailer Saks Inc. (>> Saks Inc) posted a 2% rise in same-store sales, when 4% was expected. Saks said it was hurt by excluding cosmetics and fragrances from a large sale it holds in April.

Limited Brands Inc. (>> Limited Brands, Inc.), operator of Victoria's Secret and Bath & Body Works, narrowed first-quarter guidance to the high end of its projection after issuing April same-store sales that beat expectations, coming in with a 6% gain, when a 4% rise was predicted.

Off-price retailer TJX Cos. (>> The TJX Companies, Inc.) posted a 6% rise in comparable-store sales, when 4% was expected, and lifted its first-quarter and full-year earnings view, citing significant increases in customer traffic.

Among teen retailers, Zumiez Inc. (ZUMZ) reported a 10.1% rise in same-store sales when 6.8% was expected. The gain came on top of 17.5% growth in April a year ago.

Wet Seal Inc. (>> The Wet Seal, Inc.) posted a 9.6% drop in comparable-store sales when a 9% decline was expected. And Buckle Inc. (BKE) same-store sales gained 1%, when a 0.9 rise was projected.

Stage Stores Inc. (>> Stage Stores, Inc.) posted a 1% drop in same-store sales when analyst were looking for a 4.8% decline. The department store chain said it saw comparable-store sales increases in its cosmetics, home and gifts, junior's, misses sportswear and petites categories during the month.

Geographically, the Mid Atlantic, Midwest, Northeast, South Central and Southwest regions all had comparable store sales gains.

"We expected April to be challenging given the negative impact of the Easter calendar shift and the timing shift of our Mother's Day event to May this year from April last year," Stage Stores Chief Executive Michael Glazer said. "However, April results were better than anticipated and, as a result, we exceeded our comparable store sales expectations for the quarter."

-By Karen Talley, Dow Jones Newswires; 212-416-2196; karen.talley@dowjones.com

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