APRIL SALES CHILL SOME SPECIALTY STORES
Byline: Jennifer Weitzman / Thomas J. Ryan
NEW YORK — Cold weather and the late Easter took a toll on sales at Gap, Nordstrom and American Eagle in April, while Intimate Brands Inc., which is more focused on lingerie and bath and body products that are less dependent on temperature swings, banged out a 21 percent same-store sales gain.
IBI sharply exceeded its internal targets, but The Gap Inc. said weaker than expected sales may cause it to fall slightly off Wall Street’s first-quarter estimates.
Nordstrom, reporting a 4.5 percent gain, met most Wall Street estimates, but the store noted that women’s apparel same-store sales declined. American Eagle Outfitters logged a 5.8 percent gain, though the teen-oriented casual chain had warned last week that unseasonably cold weather and poor dress sales would cause it to miss its goal of an 8 percent to 11 percent rise.
Most major retailers will report April sales results today.
Gap Inc.’s 7 percent comp-store gain compared with a 1 percent decline a year ago. It missed its plan for between 13 percent and 15 percent.
Heidi Kunz, chief financial officer, said during a conference call that a disappointing Easter shopping period throughout April and poor weather in the North and Midwest were to blame for the shortfall in its plan. She said this could lead to earnings pressures by a penny or two for the quarter. Analysts were expecting Gap to earn 28 cents against 22 cents.
The Gap brand domestically had a positive high-single-digit gain versus negative high single digits last year. Banana Republic had positive a high-single-digit gain versus positive high-single digit last year. Old Navy had a positive midsingle-digit gain versus a positive high single digit last year, and Gap International had a positive mid-single-digit gain, versus a gain in the midteens last year.
Big markdowns cut into margins during the month.
The Gap chain had a good response to its “West Side Story”-inspired ad campaign, and had strength in women’s denim and bottoms and children’s apparel. Kunz said Banana did best with bright colors, men’s knitwear and casual bottoms. At Old Navy, positive results were seen in knit tops, newborn and toddlers’.
At IBI, same-store sales surged 21 percent with a 26 percent gain at Victoria’s Secret Stores and 15 percent at Bath & Body Works. IBI had told analysts it expected a 13 percent to 15 percent gain. Overall merchandise margins were flat with last year’s.
Sales at Victoria’s Secret Stores were driven by a new strapless five-way bra under the Body by Victoria brand, and overall “excellent demand” for that bra brand. VS Beauty saw an “excellent customer response” to Dream Angels fragrance and Pure Reflections lipstick. Comps are expected to rise between 6 percent and 8 percent in May, with the Body Flex bra to launch in the second half of the month.
At Victoria’s Secret Catalogue, where lingerie as well as sportswear represents a huge proportion of the inventory, sales were up 1 percent. Lingerie continued to show the strongest gains, although apparel was also up. Merchandise margins were down from last year. The division, which includes e-commerce sales, is expected to see a decline in sales in May due to a one-week delay in shipping a book.
BBW’s comps were driven by an increase in its Mother’s Day promotion to 4.8 million coupons from 4.2 million in 1999. Sales drivers included a new Pure Silk bath collection as well as core toiletries and home fragrances. BBW’s May comps are expected to rise between 4 and 6 percent with the stores featuring a new Summer Refreshes body care line and a new sun care collection.
Nordstrom’s same-store gain was driven by a 3.8 percent climb at its full-line stores and an 11.4 percent hike at Rack outlets. Stronger sales at full-line stores in women’s accessories, cosmetics, shoes, men’s apparel, juniors and children’s offset declines in women’s apparel.