By Karen Talley
Retailers are posting tepid sales for a second month in a row,
with March blasted by cold weather and a still-uncertain consumer,
much like February.
Spring and summer merchandise remained on racks during a month
that traditionally marks the beginning of warm-weather buying.
"The mass public is still not feeling good about discretionary
spending," said Nancy Liu, retail strategist at consulting firm
Kurt Salmon. "Gas prices are still high, the job market is still
slow to recover, so there is a lack of confidence."
Because of sluggish buying, "on the retailers' side, there could
be pressure on inventories that could lead to heavier-than-usual
discounting" in late spring and early summer, Ms. Liu said.
Among retailers bucking the trend, Costco Wholesale Corp. (COST)
posted a 6% rise in U.S. same-store sales minus gas, when 5.9% was
expected.
L Brands Inc., the former Limited Brands, saw same-store sales
grow 3%, when flat results were expected. The operator of
Victoria's Secret and Bath & Body Works said the Easter shift
into March this year from April last year hurt sales by 1% to 2%.
The company expects April same-store sales to rise by a
low-single-digit percentage rate. At L Brands, "New and updated
product continues to drive the business and this is a trend we
believe will continue," said RBC Capital Markets analyst Howard
Tubin.
The 11 retailers tracked by Thomson Reuters are expected to post
2.2% growth in same-store sales, or sales at stores open more than
a year. This is the lowest growth since September 2009, when 1.9%
was recorded as the economy suffered the lingering effects of the
recession. The March figure compares with 7.1% a year ago when much
of the country was enjoying unseasonably warm weather that spurred
demand and consumers to pay full price for merchandise. In
February, retailers posted 3.9% growth in same-store sales,
compared with a 7.4% rise for 11 companies a year earlier.
Even Easter falling in March this year didn't help, as
traditional spring buying around the holiday was hurt by cold
weather in many parts of the country. Last month was the coldest
March in the U.S. in 17 years, with the most snowfall in 20 years,
according to Weather Trends International, a weather-tracking
service.
Also, many retailers were closed on Easter.
TJX Cos. (TJX) posted a 2% drop in same-store sales when a 1%
decline was expected. "Due to the year-over-year timing of Easter,
we had not planned March to be a strong month against last year's
high increase," said Carol Meyrowitz, chief executive of the
operator of T.J. Maxx and Marshalls.
Zumiez Inc.'s (ZUMZ) March same-store sales rose 2.1%, topping
expectations for a decrease of 7.5%. Shares are up 9.4% to $27.25
premarket.
Fellow teen retailer Buckle Inc. (BKE) posted flat
comparable-store sales when a 0.3% decline was expected.
Fred's Inc. (FRED) posted a 3% drop in same-store sales when a
1.7% decline was expected. The discount retailer "expected that
March general merchandising sales would be adversely affected by
unseasonably cool weather and the timing of the Easter holiday,"
with seasonal and lawn and garden departments especially hard hit,
said Chief Executive Bruce Efird.
Gap Inc. (GPS), which reports after the closing bell, is
expected to post a 2.1% decline, its first drop in same-store sales
in just about a year.
--Write to Karen Talley at karen.talley@dowjones.com
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