Retailers experienced a mild spring thaw last month, but hardly April showers of customers’ dollars.
The shift of Easter into April and the first signs of spring weather helped most retailers trim the decreases in their comparable-store sales last month, and in some cases, even raise their margins and first-quarter guidance. But declines remained widespread and sometimes steep, especially for high-end retailers continuing to take the biggest bashing as consumers opt for value or a total break from spending.
Among the hardest hit, Saks Inc., Neiman Marcus Inc. and Nordstrom Inc. reported comp declines of 32, 24.6 and 10.8 percent, respectively, and upscale teen retailer Abercrombie & Fitch Co. saw its results for the month slide 22 percent.
The value message carried the day, good news for Wal-Mart Stores Inc., which logged a better-than-expected 5.9 percent increase in same-store sales at its U.S. discount stores, adding up to a 2.9 percent gain for the March-April period. However, citing the need for more long-term thinking, Wal-Mart said it would discontinue reporting monthly sales results and in the future would provide comps results only on a quarterly basis. Earlier this year, the retailer ceased providing monthly sales guidance.
Target Corp. posted a 0.3 percent increase and said it expected first-quarter results to be higher than consensus estimates of 52 cents.
Gregg Steinhafel, chairman, president and chief executive officer of Target, said, “For the first quarter overall, retail segment financial performance was significantly better than expected, and the credit card segment performed in-line with our prior guidance.”
Value translated especially well for off-price retailers The TJX Cos. Inc. and Ross Stores Inc., which were up 3 and 6 percent, respectively, and BJ’s Wholesale Club Inc., up 5.5 percent. TJX ceo Carol Meyrowitz cited “extreme value” for her firm’s performance, which came against expectations of a decline for the month. Michael Balmuth, her counterpart at Ross Stores, pointed to “compelling bargains” as the company lifted earnings guidance for the first quarter. At Ross, dresses, children’s and shoes were the standout categories.
“The retail sales declines are finding a bottom, but it’s a bumpy bottom,” said Frank Badillo, senior economist at Retail Forward. “The Easter shift has caused some of the turbulence the last two months. In the coming months, there will probably be more bumpiness because of the effect of last year’s economic stimulus and the uncertain impact of this year’s stimulus.”
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