Video: Mixed bag

updated 5/5/2005 3:07:27 PM ET 2005-05-05T19:07:27

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 report their monthly sales Thursday, Wal-Mart Stores Inc., the world’s largest retailer, and rival discounter Target Corp. turned in disappointing performances. But teen retailers and wholesale clubs had substantial sales gains. Another standout was J.C. Penney Co. Inc., which reported gains that beat estimates.

“The results were uneven, but there were clear pockets of strength,” said Michael P. 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 percent gain that he had 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.

“Overall, it was a pretty solid report,” said Gint Rimas, a senior analyst at Thomson Financial. “Expectations were lower, but consumers are still out there shopping.”

Retailers’ stocks rose Thursday. Wal-Mart’s shares gained 44 cents to $48.89 on the New York Stock Exchange, where it has traded in a range of $46.20 to $57.89 over the past 52 weeks. Target rose 97 cents to $47.25; it has ranged between $40.03 and $54.14 over the 52-week period. Federated Department Stores Inc. was up $2.43 at $62.60, with a 52-week range of $42.80 to $65.08.

The nation’s discounters, whose customers have been particularly hurt by high gas prices, had another lackluster month.

Wal-Mart had a 0.9 percent gain in same-store sales, or sales open at least a year, slightly below the 1 percent consensus prediction of Wall Street analysts polled by Thomson Financial. Same-store sales are considered the best indicator of a retailer’s health. Total sales rose 7.4 percent.

Wal-Mart did get a boost from Sam’s Club, which posted a 4.9 percent gain for the month. That compared with the company’s flagship discount stores, which had only a 0.1 percent increase.

Rival Target had a 1.3 percent gain, below the 2.3 percent forecast. Total sales rose 7.7 percent.

Major Market Indices

Costco Wholesale Corp. enjoyed a same-stores sales gain of 8 percent, surpassing the 6.7 percent analyst estimate. Total sales rose 11 percent.

BJ’s Wholesale Club had a 8.4 percent gain, outpacing the 4.1 percent forecast. Total sales rose 12.5 percent.

Perkins noted that 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.

Mid-level department stores had an uneven performance. Penney had a 3.6 percent gain in department stores, above the 1.7 percent Wall Street forecast. Total department store sales rose 4.7 percent.

Federated posted a 2.8 percent increase, better than the 0.5 percent estimate. Total sales rose 2.6 percent.

May had a 1.5 percent increase for the month, better than the estimated 2.0 percent decline. Total sales rose 20 percent.

But Saks Inc., pulled down by its moderate-priced stores, had a 0.3 percent gain in same-stores sales, worse than the 2.1 percent forecast. Total sales fell 1.2 percent.

Upscale department stores again had strong gains. Nordstrom Inc. had a 6.9 percent gain in same-store sales, above the 3.6 percent forecast. Total sales rose 8.1 percent.

Neiman Marcus Group Inc. had a 14.2 percent gain, beating the 6.2 percent estimate. Total sales rose 13.3 percent.

Apparel retailer Talbots Inc. had a 7.1 percent gain, far surpassing the 2.3 percent forecast. Total sales rose 11 percent.

Limited Brands, which owns stores including Victoria’s Secret, had a 4 percent drop in same-store sales, worse than the 1 percent decline analysts predicted. Total sales rose 1.8 percent for the month.

But Gap Inc. suffered a 5 percent decline in same-store sales, worse than the 2.5 percent forecast by Wall Street. Total sales fell 2 percent.

Teen retailer American Eagle Outfitters Inc. rose 20 percent, beating the 18.9 percent estimate. Total sales rose 30.2 percent.

Rival Abercrombie & Fitch Co. had a 16 percent same-store gain, better than the 12.2 percent estimate. Total sales rose 31 percent.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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