The nation’s biggest retailers struggled with mixed sales in March as unusually cold weather kept shoppers indoors in many parts of the country, but analysts said the industry’s recent upbeat trend nonetheless appeared intact.
As retailers reported sales Thursday, heavyweights Wal-Mart Stores Inc. and Limited Brands had results that missed Wall Street forecasts. And moderately priced J.C. Penney Co. Inc. said its sales barely rose, soundly missing estimates, while discount department store operator Kohl’s Corp. had an unexpected drop in business.
Even some upscale retailers like Neiman Marcus Group Inc. were hurt by the weather.
But youth-oriented apparel sellers including Abercrombie & Fitch Co. and Bebe Stores Inc. were big winners, posting sharply better than expected results. And discounter Target Corp. easily beat forecasts.
Analysts said that taken together, March’s results showed that Americans’ willingness to spend remains robust despite oil prices in the $50 range and the threat of rising interest rates, though last month showed signs of a drop-off after strong sales recorded in January and February.
“March sales were very mixed and there’s some evidence of some slowing down, but it has to do more with weather rather than the economy,” said Michael Niemira, chief economist at the International Council of Shopping Centers in New York.
“Will consumer spending retrench as the economy wrestles with broader concerns like higher gas prices? The worry is there, but looking at these numbers, it doesn’t appear to be a major negative for sales. Consumers continue to spend,” Niemira said.
Based on preliminary results, the International Council of Shopping Centers-UBS sales tally of 67 retailers rose 4.1 percent in March, roughly in the middle of a projected gain of 3.5 percent to 4.5 percent. In February, the tally rose 4.7 percent.
The tally is based on what the industry calls same-store sales, or sales at stores open at least one year. Analysts consider same-store sales the best indicator of a retailer’s performance.
In another encouraging sign for consumer spending, a government report said the number of Americans applying for jobless benefits fell by 19,000 last week, the biggest decline in two months. The decline pushed the level of unemployment benefits down to 334,000, after claims had unexpectedly jumped by 23,000 the previous week, the Labor Department said.
March is an important month for retailers because it sets the tone for spring sales. This year, March took on added importance since it included Easter, which typically marks the biggest surge in consumer spending between New Year’s and Memorial Day.
Wal-Mart said its March same-store sales rose 4.3 percent, shy of the 4.4 percent predicted by analysts surveyed by Thomson Financial. Total sales for the month rose 11.3 percent.
The world’s largest retailer also pegged quarterly earnings at the low end of its target range, and forecast a modest rise in April same-store sales, between flat and 2 percent, blaming the shift in the Easter holiday and continuing bad weather.
Limited Brands, operator of Victoria’s Secret, Bath & Body Works, and Express clothing chains, said its same-store sales fell 7 percent, worse than the 2.2 percent decline forecast by Wall Street. Its total sales for the month slipped 2 percent.
Kohl’s said its same-store sales fell 1 percent, defying expectations of a 0.4 percent gain, while total sales for the month rose 9.4 percent.
Penney said its same-store sales edged up 0.1 percent, missing an estimated 4 percent rise. The department store operator said strength in southeastern and western states was offset by weak performance in the Midwest and Northeast during the Easter selling season. It also forecast current-quarter sales would range from flat to up slightly.
“The primary trend is the teen retailers have again blown out their numbers,” said Ken Perkins, president of RetailMetrics LLC, in Boston.
Youth apparel seller Abercrombie & Fitch Co. said its sales jumped 21 percent, blowing past estimates of a12.6 percent gain, while total sales for the month surged 34 percent.
Bebe Stores Inc., which sells young women’s apparel and accessories, said its same-store sales climbed 30.6 percent, beating analysts’ estimate for a 25.9 percent rise. Its total sales surged 42.4 percent.
In the moderate-to-high end, Nordstrom Inc. said its same-store sales rose 5.5 percent, above an estimated 4.1 percent gain, while its total sales rose 6.7 percent. Federated Department Stores Inc., which operates Macy’s and Bloomingdale’s, said its same-store and total sales rose 3.4 percent, beating a projected 2.4 percent rise.
Still, the high end sector had its share of disappointments. Both Neiman Marcus and Saks Inc. reported higher sales, but the gains fell short of forecasts. Neiman Marcus had a 3.4 percent same-store gain, and a 2.2 rise overall, while Saks had a 1.1 percent same-store increase and a 2.3 percent rise in total sales.
Target said its March same-store sales surged 8.2 percent, above estimates, and said it expects to meet or beat its first-quarter earnings estimate. Total sales rose 14.3 percent.
Gap Inc. said same-store sales fell 4 percent, worse than the estimated half-percent decline, while total sales for the month declined 1 percent.
Women’s clothing seller AnnTaylor posted a 1.7 percent sales decline, reversing a 12 percent surge in the year-ago period, but still better than analysts’ forecast of a 2.4 percent drop. Total sales for the month rose 12.5 percent.