Byline: Thomas J. Ryan

NEW YORK — Federated Department Stores Inc. on Tuesday reported March same-store sales fell 0.6 percent, becoming the first retailer to admit to getting snagged by this year’s dreaded late date of Easter.
Wall Street analysts expect most retailers to post flat to minuscule comp declines or gains for March because of Easter, which fell on April 4 last year, is April 23 this year. A lack of pre-Easter-related sales events — usually starting two weeks before the holiday — as well as the absence of a spring break to drive sales at teen chains should crimp results, according to reports issued by several Wall Street firms. Retailers are also going against tough comparisons, since spring 1999 was exceptionally robust.
But analysts said consumer spending remains healthy and Easter’s arrival should lift April comps in the mid-to-high single digits. Solid apparel sell-throughs are being boosted by clear fashion trends, such as more color, and warm weather, leading to strong full-price sales and possible first-quarter earnings surprises for many chains.
“While the Easter shift causes absolute [comparable-store sales] changes to look anemic during March, after adjusting for the Easter shift, most chains have reported comp sales in line to slightly above plan,” said Thomas H. Tashjian at Banc of America Securities.
Federated’s comps, although down 0.8 percent, were slightly better than plan, which called for a 1 to 1.5 percent drop. Federated, which reported its sales early because of an analysts’ meeting Tuesday at its Cincinnati headquarters, was going against a 9 percent comp increase last year.
Most U.S. chains will report March sales figures Thursday.
Federated’s chairman and chief executive, James M. Zimmerman, said results were in line with expectations and advised looking at March-April sales together, “in order to get a more accurate picture of sales performance for the period.”
Federated is guiding Wall Street to expect a comp gain of 6 percent to 7 percent April, with the combined March-April gain ahead 2.5 to 3 percent.
Richard Church, at Salomon Smith Barney, said his investment firm’s index of broad-line stores, which includes department stores and discounters, should eke out a 0.9 percent same-store gain in March due to what he said was the latest Easter since 1984. April comps should climb in the high single digits with Easter’s arrival, pushing combined March-April comps ahead 5 percent, Church said.
“The first quarter is not showing any real signs of a slowdown, and we see upside potential at most of the retailers you would expect — Kohl’s, Target, Wal-Mart and Federated,” said Church.
Tashjian said Banc of America’s department store index should show flat to slightly positive comps in March versus a 4.7 percent gain in March 1999, while its discount store index is projected to nudge up 0.6 percent against a 10.9 percent hike last year. Although he also expects sales to bounce back in April, he said the picture was less clear for margins, which may be helped by later promotions and warmer weather or eventually hurt by the postponement of sales until late in the first quarter.
Kohl’s projected flat March same-store performance is expected to be a standout, since the firm was going against an 18 percent comp gain last year. Sears comps are also expected to come in ahead of plan, up 1 to 3 percent — though they are being driven by hard lines.
Projections on Nordstrom’s comps are from slightly down to ahead 3 percent as analysts debate the success of its new advertising campaign. Saks is expected to be flat to slightly down, but Saks Fifth Avenue, which boasted a 15 percent comp gain in February, is outperforming. Neiman Marcus and is expected to show a 6 percent comp gain.
Discounters, considered less reliant on Easter fashions, delivered results generally in line with plan, with the help of strength in basics and consumables. Projections call for Wal-Mart to show comps up 1 to 2 percent; Kmart, flat to slightly down, and Target, down in the low single digits.
Those missing plan include J.C. Penney, with comps expected to tumble 8 to 10 percent at its department-store division against a plan for a 5 percent decline. May’s comps should fall between 3 percent to 4 percent versus a 1 percent to 1.5 percent planned decline. Dillard’s comps are projected to drop 5 percent.
Among specialty stores, Talbots is projected to lead specialty stores with a comp gain of 13 percent and 15 percent. Others expected to deliver same-storesales increases are TJX, between 2 percent and 4 percent; Hot Topic, 12 percent; Intimate Brands, 3 percent, and American Eagle Outfitters, in the low single digits. Both Ann Taylor and Limited comps are expected to be flat to down slightly.
Gap is expected to slide 3 percent to 5 percent against a 21 percent March 1999 comp increase, with declines of 1 percent to 3 percent at Old Navy and 7 percent to 9 percent at domestic Gap.
“Despite the Easter shift, we believe that March business was robust at many specialty apparel retailers and think the potential for upside to our estimates is strong,” said Joe Grillo, at Deutsche Banc Alex. Brown.
While flat to slightly down for March, comps at specialty chains should rise in the mid to high single digits in April to lead to a 3 percent to 4 percent two-month gain. Grillo said value retailers were running in line or slightly ahead of expectations, benefiting from favorable economic conditions, improved inventory trends and spring-like weather.
Carol Pope Murray, who covers apparel vendors for Salomon Smith Barney, said, “Momentum definitely built in the quarter, from a promotional January to what undoubtedly will be a very strong month.” Fashion and accessories were hot sellers, and women’s seems to be outperforming men’s. Murray noted that both Liz Claiborne and Jones Apparel Group said March retail sales were “significantly ahead” of last year and internal plans.