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Neither the weather, the calendar nor year-ago comparisons broke in favor of retailers reporting March comparable-store sales results Thursday, leaving most with only small gains and hopes for a better April.
Weather proved unseasonably cool in many parts of North America and Europe as well, and an earlier Easter made sales of new spring merchandise even more challenging. It didn’t help that stores were up against strong March 2012 figures as first-half numbers last year suggested a more muscular recovery.
Thomson Reuters put the mean gain for the month at 1.5 percent, weaker than the 1.8 percent pickup it had earlier forecast. Improved sales late in the month, as weather turned more seasonal, helped limit the downside.
The last company to file in what is now a greatly abbreviated roster of retailers, Gap Inc. proved an upside surprise with a 1 percent decline, ahead of the 2.1 percent drop expected. Banana Republic posted a 1 percent gain, while Gap was flat and Old Navy was down 2 percent.
Between the early timing of Easter and the late arrival of spring weather, stores were challenged to move spring goods. While Ross Stores Inc. beat estimates of a 1 percent decline with a 2 percent gain, enough to raise first-quarter earnings estimates, its off-price competitor The TJX Cos. Inc. reported a rare miss, comping down 2 percent.
Carol Meyrowitz, chief executive officer of TJX, noted that despite “extraordinarily cold weather across most regions of the U.S., Canada and Europe,” the decrease fell within its expectations. “In regions of the U.S. where weather was not an issue, we saw comp sales increases,” she said. “Further, overall business trends improved as the weather became warmer.”
She added that April was “off to a good start,” and that merchandise margins for the first quarter are up from a year ago and the company’s buyers “are seeing an enormous amount of desirable product in the marketplace.”
Arnold Aronson, managing director of retail strategies at Kurt Salmon, noted, “It used to be taboo to use the weather as an excuse for a bad month, but it’s become so volatile with what’s happened to the environment that, paired with an early Easter, the most important part of a store’s spring mix did get hit.”
Taking a more optimistic view, he noted that stores were up against strong year-ago numbers, “and most still managed to put up numbers that were black. But between the uncertainty in Washington and even reminders of something like the Newtown massacre, business is just slogging along at a very, very modest rate of growth — the very low single digits.”
The International Council of Shopping Centers put the gain for the month overall at 1.5 percent. “I am optimistic that April’s numbers will have a more positive outlook as warmer temperatures should drive demand for seasonal apparel,” said Michael Niemira, vice president of research and chief economist at ICSC.
But Craig Johnson, president of Customer Growth Partners, said his research teams had “continued to see weakening retail spending in our store checks. The weakness is across all price points and across merchandise categories and is not simply due to tax issues or the weather.”
American Apparel Inc. led the month with an 8 percent increase, including a 5 percent gain in same-store sales. Among the stores beating estimates for the month were L Brands Inc., formerly Limited Brands, up 3 percent versus expectations of a flat finish; Zumiez Inc., up 2.1 percent against an expected 7.5 percent drop, and The Buckle Inc., flat against an anticipated 0.3 percent drop.