Shoppers shrugged off the snow that hammered much of the country in February to buy spring clothing and other items, resulting in the strongest retail sales gain since November 2007, a month before the recession started.
A broad array of merchants, from luxury retailer Nordstrom to midbrow Macy's Inc. and Limited Brands Inc. and discounter Target Corp., reported rising sales on Thursday that beat Wall Street analysts' estimates. The 3.7 percent gain in February, according to the International Council of Shopping Centers, came in the face of a decline in consumer confidence.
It marked the third consecutive monthly sales gain for retailers.
According to a preliminary list from Thomson Reuters, 14 merchants saw their sales beat estimates. Only three missed expectations.
"It is quite remarkable that many stores beat expectations," said Ken Perkins, president of RetailMetrics, a research firm. "Consumers were willing to shop in between snowstorms."
But he said shoppers are still skittish in the face of high unemployment and tight credit. "The consumer spending recovery is going to be slow, long and gradual," he said.
While consumers are starting to spend a little more, the figures are positive partly because sales in February 2009 were so awful. That month, consumer confidence hit an all-time low.
The figures for sales at stores open at least a year are an important measure of retailers' health.
February, sandwiched between post-holiday clearance and spring, is the second-least important month of the year for retailers after January. Analysts see combined data for March and April as a more accurate measure of consumer behavior.
But analysts are studying retailers' February reports for signs the economic rebound might strengthen. That's because most economists agree that business investments and exports may drive a short-term recovery, but a robust turnaround in consumer spending is essential to keep it going.
Consumer confidence dove unexpectedly in February. And unemployment, 9.7 percent in January, is expected to increase to 9.8 percent in February. Economists say snowstorms could have inflated job losses by as much as 100,000. The Labor Department is to report job figures on Friday.
Thursday's reports offered some encouraging signs that shopppers were willing to pay full price for spring clothing, analysts said.
Target, the nation's second largest discounter behind Wal-Mart Stores Inc. said February sales in stores open at least one year rose 2.4 percent as more customers came into stores and spent more compared with a year ago.
Results beat Target's expectations of a flat to slight rise in the sales figure. Analysts had expected a 1 percent increase. However, food and household essentials remained the biggest sellers with furniture and apparel sales about flat with last year.
The company expects April sales in stores open at least one year to be up in the mid- to upper-single digits because of an earlier Easter.
Rival Wal-Mart Stores Inc. stopped reporting sales results on a monthly basis last year.
Discounter Fred's Inc. reported that its sales at stores open at least a year climbed 2 percent in February as customers headed to its stores to take advantage of advertised promotions. That was better than the 0.3 percent decline analysts had expected.
Among department stores, Macy's topped expectations and said its sales at stores open at least a year would have gone higher if shoppers hadn't been disrupted by winter storms.
The department store operator reported a 3.7 percent gain, above the 1.4 percent estimate.
CEO Terry J. Lundgren said sales at stores open at least a year would have been up about 5 percent without the snow.
J.C. Penney reported a 1.2 percent gain in sales at stores open at least a year. Analysts had expected a 1.3 percent drop.
Victoria's Secret parent Limited Brands, which raised their February sales outlook last week, enjoyed a 10 percent increase. Analysts surveyed by Thomson Reuters had expected a 9.7 percent gain.
Teen retailer Wet Seal had a 4.7 percent gain. Analysts expected a drop of 2.7 percent.
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