Tags: US | Retail | Sales

March Retail Sales Hit Record But April Seen Weaker

Thursday, 08 Apr 2010 07:44 AM


Top U.S. retail chains posted a record rise in monthly same-store sales in March, helped by an early Easter holiday and an improving job market, in the strongest sign yet of revived consumer demand.

Sales at stores open at least a year rose 9.1 percent in March, the largest monthly jump since Thomson Reuters began tracking results in 2000 and ahead of Wall Street estimates of a 6.3 percent increase.

More than 90 percent of 28 retailers tracked beat expectations.

Executives at retailers from department store operator Macy's to discounter Target Corp. warned that the huge jump in March would come at the expense of April sales.

But analysts and economists took a brighter view of the two-month period, saying underlying consumer spending was accelerating.

"Even if you take out Easter, you still saw a better month this month than you did in February and January," said Doug Conn, credit analyst and managing director at Hexagon Securities. "There's something going on besides Easter, in other words."

Michael Niemira, chief economist at the International Council of Shopping Centers, said same-store sales had risen 9 percent in March by his tally, and he predicted April would be flat to down 3 percent.

"I think we are seeing that sustained pickup," he said. "It won't be 9 percent. It may be 4 percent."

Retail shares tracked by the Standard & Poor's Retail Index rose 0.9 percent on Thursday, compared with a 0.3 percent decline for the wider S&P 500 Index.

Department stores showed the biggest gains in March, with a 12.3 percent increase, but also said April results would be far more modest.

Macy's said same-store sales rose 10.8 percent in March from a year earlier, well ahead of the 7.9 percent increase analysts had expected, but it forecast flat results for April.

Rival chain Kohl's forecast a low double-digit percentage same-store sales decline following its 22.5 percent surge in March.

Other retailers sounded similar warnings. TJX Cos Inc. said same-store sales were up 12 percent, far above estimates, prompting the off-price retailer to raise its profit outlook. But it sees much more modest same-store sales growth of 2 percent to 4 percent in April.

Kohl's shares fell 0.5 percent, while Macy's was up 1.1 percent. Morning gainers also included Target, up 2.4 percent after it said earnings would come in ahead of Wall Street forecasts, and Gap Inc.,  which rose 3.5 percent after reporting a monthly sales growth rate that was more than double the average forecast.

Retailers that reported March sales above Wall Street expectations also include Limited Brands Inc., which posted a 15 percent rise.

Upscale department store Nordstrom Inc. reported an increase of 16.8 percent, compared with estimates of 10.6 percent, and rival Saks Inc. also beat estimates, posting a 12.7 percent rise.

But in a sign of how Wall Street expectations may be getting ahead of performance in some cases, Abercrombie & Fitch came in short of forecasts with only a 5 percent rise. Its shares fell 2.6 percent.

© 2015 Thomson/Reuters. All rights reserved.

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