Gap Inc. was one of only a few retailers with comp increases in February but it couldn’t escape the snow in New York on Thursday.

February same-store sales came in below plan and, thanks to inclement weather for much of the month, below year-ago levels, too.

NEW YORK — “The snowfall caused the shortfall.”

That’s how retail analyst Todd Slater, of Lazard Frères, summed up February’s comparable-store sales, which he further characterized as “the worst February comp performance since 1993.”

This story first appeared in the March 7, 2003 issue of WWD. Subscribe Today.

With retailers’ customers housebound by a brutal Presidents’ Day weekend snowstorm, heightened terrorist warnings, incessant tension about Iraq and North Korea and escalating gas prices, few retailers were able to match their year-ago comp numbers. In fact, only 11 of 50 firms surveyed by WWD managed a same-store increase. Wal-Mart Stores, one of the few advancers, said its sales were helped by pantry-loading of water, canned foods and duct tape, hardly the environment for the merchandising of miniskirts or the promotion of pedal pushers.

Last month’s snowstorm was not only severe but poorly timed, arriving just as mid-month holiday promotions were slated to provide the biggest chunk of their sales for the month. Instead, stores were closed or virtually empty and a challenging month became an outright struggle.

Stores found little consolation in the fact that spring merchandise checked well in less wintry locales, and there was a sense that rock salt had been rubbed in the wound when the Northeast was hit by another icy snowfall on Thursday, arriving just as the anemic February sales results did.

“It was as horrible as we imagined,” Slater said. “It’s said that hope springs eternal, but in February, it was forfeited to snowfall.”

The Goldman Sachs Retail Index was flat in February, reversing a 5.6 percent increase in the 2002 month. Again, discounters were able to shovel out by posting a 2.6 percent increase in February, down from a 9.7 percent increase last year, but better than the 1.3 percent increase forecast by GS. Specialty apparel stores fell 2 percent, compared with a 3 percent decrease last year and expectations of a 2 percent increase. Department stores faltered, falling 5.6 percent, versus a 0.4 percent increase last year and the 5.5 percent drop penciled in by GS.

And the forecast for March is still a winter advisory. Most retailers declined to provide earnings guidance for the first quarter based only on results from its first month, but all are cognizant of the negative impact of Easter’s shift from March last year to April this year.

Dana Telsey, a retail analyst with Bear Stearns, said monthly sales finished in line with expectations that fell along with the snow.

“Positive sales won’t be apparent until April as Easter shifts to April 20 from March 31, but first-quarter results will probably be disappointing due to more promotions and weaker traffic as consumers are more focused on watching CNN than shopping,” Telsey said.


Gap Inc. differentiated itself last month not just through its merchandising but also by reporting a comp increase. Its 8 percent rise marked its fifth consecutive month of comp increases as increased conversion and higher units per transaction offset continued declines in store traffic levels. By division, Gap comps grew 10 percent and Old Navy rose 8 percent, offset by a 3 percent drop at Banana Republic.

“Given the low consumer confidence levels and the extreme weather that occurred during February, we are pleased with the overall comp sales performance,” a company spokeswoman said on a prerecorded call. “Our customers continue to respond favorably to our product.”

While overall merchandise margins were slightly lower than last year, driven by increased markdown selling, she pointed out that markdown margins improved significantly over the prior year and that Gap entered February with markdown inventory levels comparable with last year’s and ended the month with markdown levels below year-ago marks.

Limited Brands reported a 1 percent comp decline, slightly below its expectations for a flat performance. Victoria’s Secret continued its domination, reporting a 5 percent comp increase, above expectations. However comps at Bath & Body Works were below expectations, falling 3 percent. Apparel comps fell 6 percent, with disappointing results at Express (down 7 percent) and Limited stores (down 4 percent). Women’s comps at Express were below expectations due to weakness in sweaters, woven pants and denim, while Limited saw softness in casual pants, sweaters and accessories. The company projected March comps to decrease 3 to 5 percent, impacted by the late Easter.

As reported, comps for youth retailing standouts Pacific Sunwear and Hot Topic rocked on last month, rising 14.8 and 4 percent, respectively. However, the Three A’s — Abercrombie & Fitch, American Eagle Outfitters and Aeropostale — comped down 4, 7.8 and 3.1 percent, respectively, and declines were even more precipitous at Bebe Stores (15.2 percent) and Wet Seal (31.5 percent).

A&F’s Hollister nameplate achieved a double-digit comp increase despite its big brother’s woes, and women’s comps were positive company-wide. Despite difficult selling conditions, A&F said it maintained its nonpromotional stance for spring, resulting in higher average selling prices and margins last month. It reiterated First Call’s earnings-per-share guidance for the first and second quarters of 25 cents and 34 cents, respectively.

At AE, comps fell a whopping 18.5 percent at Bluenotes/Thriftys and 7 percent at U.S. stores. Women’s comps declined in the low-single digits. Key items were graphic T-shirts, denim, skirts, woven shirts and underwear.

While chief financial officer Laura Weil noted that monthly performance was hurt by the presence of about 60 percent of its comp base in the recent Snow Belt, she added that stores outside of it fared better and those in warm-weather areas enjoyed comps in the high-single digits.

Similarly, Arnold B. Zetcher, chairman, president and chief executive of Talbots, said in a statement: “Our total February performance was significantly impacted by adverse weather that affected more than 60 percent of our stores, resulting in approximately 500 store closings.” Talbots, which operates 894 stores, weathered an 11.7 percent comp drop last month and expects first-quarter earnings to fall below last year’s levels.


Business was so tough in February that even perennial comp pacesetter Kohl’s Corp. posted a 4.6 percent comparable-store sales decline.

Kohl’s was up not only against blustery conditions, but also tough comparisons from a year ago, when an early break in spring weather drove comps up 14.4 percent. “Our inventory is well-positioned with a significant amount of new spring content and new brands that are being introduced and expanded throughout the store,” said Larry Montgomery, ceo, in a statement. “We are confident that we will see acceleration in apparel sales with the onset of spring weather.”

Federated Department Stores Inc. posted a 6.8 percent drop, while The May Department Stores Co. absorbed an 8.9 percent decrease.

In the national chains, J.C. Penney Co. Inc.’s department stores comped down 2.1 percent, with fine jewelry, driven by Valentine’s Day sales, and home coming up with the best results. Sears, Roebuck & Co., which was forced to close about 130 stores and key distribution centers over Presidents’ Day weekend, saw its domestic same-store sales fall 9.4 percent. Soft-line comps in the firm’s full-line stores fell by a percentage in the low-double digits, while women’s and men’s were down in the high-single digits.

Insulated from most of the snow, Dillard’s Inc.’s comps ran countertrend and rose 3 percent for the month. Saks Inc.’s department store division also comped up, rising 1.2 percent. The firm’s luxury Saks Fifth Avenue unit, though, comped down 11.4 percent. Overall, Saks’ comps fell 4.1 percent.

Elsewhere in the luxe world, same-store sales at The Neiman Marcus Group rose 2.5 percent, while Nordstrom Inc. comped down 2.3 percent.


With its broad geographic base, Wal-Mart Stores Inc. managed to weather the storm better than many other retailers.

Comparable-store sales for the firm’s flagship division and the U.S. overall rose 2.6 percent. Initially, the Wal-Mart division was looking for comps to rise by 3 to 5 percent. At Wal-Mart, average ticket increases drove the comps, as traffic was flat.

Because of the shift of Easter to April this year, versus March last year, the firm is looking for a low-single-digit increase in its U.S. comps this month, and a high-single-digit rise next month.

Target Corp.’s same-store sales overall fell 1.4 percent in February, while its discount stores comped down 0.5 percent. The initial plan for the discount stores was for a flat to up 2 percent showing.

In March, the firm is expecting comps at its discount stores to come in flat to down 2 percent. In March and April together, though, division’s same-store sales should rise 1 to 3 percent.

Other value-orientated retailers, even those that were spared by the Presidents’ Day snowstorm, failed to finish February with increases. Among the same-store sales decliners were Value City Department Stores Inc. (down 12.1 percent), Stein Mart Inc. (10 percent), TJX Cos. Inc. (5 percent), Ross Stores Inc. (3 percent) and ShopKo Stores Inc. (1.2 percent).

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