SCORE ONE FOR STORES: SHIFT IN CALENDAR PUTS FEBRUARY ON PLUS SIDE
Byline: Jennifer L. Brady
NEW YORK — With results skewed by a favorable shift in the retail calendar, February turned out to be an uncharacteristically strong month for stores.
Sales results showed some spark for the first time in months. Many retailers Thursday reported strong same-store gains, citing early positive trends for spring goods and warmer weather and raising analysts’ hopes for a solid spring.
Analysts also pointed out, however, that some of the gains were positively affected by the calendar. This year, February consisted of the four weeks ended March 2, compared with the four weeks ended Feb. 25 last year. Retail observers said the later reporting date helped boost the numbers, since spring sales momentum tends to build as the year gets further along and Easter approaches.
Nevertheless, as coaches of struggling teams like to say, a win is a win.
Department stores as a group posted the strongest results, with Federated Department Stores showing a 9 percent same-store gain, followed by Dillard’s Department Stores, with an 8 percent comparable-store increase, and The Bon-Ton Stores, up 8.4 percent. Same-store sales at May Department Stores Co. moved ahead 7.4 percen, and Mercantile Stores Co. reported a 5.1 percent gain.
Among the large discounters, Target posted an 11.7 percent same-store increase, Kmart Corp.’s discount stores showed a 7 percent increase and Wal-Mart Stores, including Sam’s Club, reported a 3.8 percent comparable-store gain, down from last year’s gain of 6.7 percent.
Earlier, The Limited Inc. said its 4 percent comparable-store gain in February was its strongest performance since March 1994, and Neiman Marcus Group Inc. last week reported same-store sales soared 16.4 percent for the month.
“February was strong in most areas of the business, with particular strength in apparel sales, which is encouraging for the spring season,” Allen Questrom, chairman and chief executive officer of Federated, said in a statement.
Questrom noted the impact of the calendar shift, but added that he expects “healthy” comparable-store increases in March that will be balanced by weaker April comps resulting from the earlier Easter this year.
Bob Buchanan, an analyst at NatWest Securities, said February was “the best month since December 1994” on a calendar-adjusted basis. The NatWest retail same-store sales index rose 4.9 percent in February, ahead of the estimated 4.2 percent gain.
Buchanan noted that some of the gains were due to pent-up consumer demand following bad weather over the past few months, but added, “Buying power continues to grow at a rapid rate.” He said he expects “further strength” in March and April.
Peter Schaeffer, an analyst at Dillon Read, called February’s sales “refreshing,” but said the results are difficult to evaluate. He said the shift in the retail calendar gives the chains “an added advantage,” since March is generally a better month than February.
“Fundamentally, in terms of the economy and the overstored market, nothing is different than December,” Schaeffer said.
Analysts expect sales will continue to be positive in March, benefiting from the earlier Easter, which falls on April 7 this year. Easter Sunday was April 16 last year.
Off-price chains showed some signs of life in February. Same-store sales at Ross Stores came in ahead 15 percent, Value City Department Stores reported a 5.3 percent gain and TJX Cos., including Marshalls, was up 7 percent. However, Filene’s Basement Corp. reported a 2 percent same-store gain, while The Dress Barn Inc. had a 5 percent decline.
Sears, Roebuck & Co. reported same-store sales rose 5.1 percent with top performances registered in career apparel, including suits, dresses and shoes. Women’s casual apparel was also strong, particularly denim. A spokeswoman cited strength in Sears’ exclusive Van Raalte line of intimate apparel, and cosmetics. Men’s casual apparel was strong again, especially denim.
J.C. Penney Co. lagged behind other large chains in February, citing sluggish sales of women’s apparel and accessories. Same-store sales at Penney slid 0.1 percent. A Penney spokesman said women’s and children’s shoes, handbags and cosmetics all had a solid month.
Dayton Hudson Corp. said same-store sales advanced 8.4 percent, with Mervyn’s up 3 percent and the department store division reporting a 0.1 percent gain.
Bob Ulrich, chairman and ceo, said monthly sales exceeded plan at each of DH’s divisions.
“Although February represents only a small part of first-quarter and total-year earnings, we were pleased with our results for the month,” he added.
Same-store sales at a few of the specialty retailers continued to drag. Ann Taylor Stores Corp. was down 7 percent, and Talbots Inc. was off 6.3 percent. Ann Taylor’s February dip came after several months of double-digit declines and expectations that the month could mark the beginning of a turnaround. Talbots said its same-store sales decline reflected “significantly less clearance inventory” this February than it did last year. Same-store sales of misses’ sportswear declined 7 percent, while petites inched up 1.5 percent. Kids’ comps were off 9.1 percent, Talbots said.
The company noted, however, that same-store sales for the last two weeks of the month were up 4.7 percent, which represented full-price selling of new spring merchandise.
“We continue to remain cautious about spring sales trends as it is still early in the season and we are facing strong comp sales comparisons from the first quarter of last year,” Arnold B. Zetcher, president and ceo, said in a statement.
The Gap Inc. posted a 4 percent rise in same-store sales.
Other specialty chains picked up speed last month. Spiegel’s Eddie Bauer chalked up a 19 percent same-store gain, driven by a positive response to spring merchandise and strong sales of women’s apparel. Spiegel said better inventory management helped it reduce the amount of clearance goods, compared with last year. Catalog sales were flat for the month due to a decline in circulation. A company spokeswoman cited robust sales in sweaters and knits at Eddie Bauer and in dresses, shoes, accessories and swimwear at Spiegel. Same-store sales at The Buckle Inc. moved ahead 23.2 percent. Cato Corp. was up 14 percent, American Eagle Outfitters Inc. gained 14.1 percent and Charming Shoppes Inc. rose 12 percent. Claire’s Stores Inc., which sells women’s accessories, posted a 21 percent jump in same-store sales.
Woolworth Corp. said same-store sales were up 3.8 percent, while Catherine’s Stores Corp. reported a 1 percent gain.
On the downside, United Retail Group Inc.’s same-store sales were down 4 percent and Designs Inc.’s slid 2 percent.
Proffitt’s Inc., which includes Younkers, posted an 8 percent rise in same-store sales on a comparable basis. At Carson Pirie Scott & Co. same-store sales were up only 1.6 percent, reflecting changes in its promotional calendar.
On a week-to-week calendar basis, Kohl’s Corp. reported a 13.7 percent same-store gain. Gottschalks Inc.’s same-store sales dipped 2.4 percent.
A few regional discounters cranked out higher same-store sales, including Dollar General Corp., which showed a 14.1 percent gain, and Goody’s Family Clothing, up 8.2 percent. ShopKo Stores Inc.’s comps inched up 0.9 percent, but Ames Department Stores Inc. reported a 2.1 percent decline. — Fairchild News Service