U.S. retailers are posting moderate sales for February, dealing
with mixed signals like payroll tax increases and later income tax
refunds that were countered by a rousing stock market and better
housing reports.
Consumers last month also contended with higher gasoline prices
and Hurricane Sandy. The storm cost retailers with locations in the
densely populated Northeast selling days due to flooding and other
damage as well as consumers' own recovery efforts.
February "was a challenging month," said Barbara Kahn, director
of the Baker Retailing Center at the Wharton School. "Consumers
were up against mixed economic news. They faced things like the
payroll tax increases, but at the same time the stock market was
getting strong and housing was improving."
Retailers may not have been pleased with the month because they
had to shift to more promotions to get rid of winter stock as they
prepared for spring. February is the month that bathing suits and
other warm weather merchandise begins to appear on racks.
While there are fewer than a dozen retailers that still report,
their message is pretty consistent: February was a month to muddle
through. Many retailers that no longer report monthly
sales--including Wal-Mart Stores Inc. (WMT), Target Corp. (TGT) and
Kohl's Corp. (KSS) --cited weakness in February when they posted
fourth-quarter results last month.
Thomson Reuters said 10 of the 11 retailers still issuing
monthly same-store sales, excluding drug stores, posted a 3.8%
same-store sales growth for February. This compares with a 7.4%
rise for the 11 a year ago. Gap Inc. (GPS) is expected to post its
same-store sales after the market close.
The list of retailers posting monthly sales numbers has fallen
dramatically from its peak of 68 in 2005. With February marking the
start of the new fiscal year, the list is now absent some more big
names including Target, Kohl's and Macy's Inc. (M).
The fact that so few retailers are reporting doesn't mean the
monthly sales reports have become inconsequential, analysts say,
but it does limit the information about retailing and the health of
consumers that was conveyed when many more companies were
posting.
"It's still a relevant barometer, but it does not give you as
clear a picture as it used to," said Madison Riley, managing
director at consulting firm Kurt Salmon.
In other words, it's more of a thumbnail look than a
snapshot.
Costco Wholesale Corp. (COST) posted February same-store sales
growth of 6% when 4.8% was expected. Costco's relatively higher
income customer was somewhat insulated from the income tax refund
delay and increases in payroll taxes. Costco operates 622 warehouse
stores, including 448 in the U.S. and Puerto Rico.
Limited Brands Inc. (LTD) reported a comparable store sales
increase of 3%, when 2.6% was projected. Same-store sales at its
Victoria's Secret division rose 5%, while Victoria's Secret direct
was down 4%, driven by a reduction in clearance selling and a
decline in the clothing category. Bath & Body Works was flat,
hurt by negative customer traffic, and La Senza was up 5%.
TJX Cos. (TJX) posted a 1% rise in February same-store sales,
when 0.4% was expected. "Business trends picked up at the very end
of the month, leading to our February comp store sales coming in
higher than expected," said Chief Executive Carol Meyrowitz.
"Winter storms in many U.S. and Canadian regions kept customers at
home, but we were pleased to see our momentum continue in warmer
weather markets."
Fellow off-price retailer Ross Stores Inc. (ROST) said
comparable store sales declined 1%, when a 1.1% gain was expected.
"We believe the slight decline in February same store sales was
mainly due to the delay in income tax refunds," said Chief
Executive Michael Balmuth.
Stein Mart Inc. (SMRT) posted 0.6% same-store sales growth when
a flat comp was expected. "I am pleased with our February sales
performance, given the unfavorable impact of weather on certain
regions," said Jay Stein, interim chief executive. The clothing and
home-furnishings retailer said linens, ladies' casual sportswear
and men's sportswear posted the strongest sales for the month,
while ladies' boutique, ladies' special sizes, dresses and ladies'
accessories "were more challenged," the company said.
Geographically, February sales were strongest in Florida and the
West, while several other areas, including the mid-Atlantic,
Midwest and Northeast, were weaker due to seasonably cold or severe
weather.
Zumiez Inc. (ZUMZ) reported an 8.9% decline when a 1.9% drop was
expected. The company said the decrease was driven by decline in
comparable store transactions, partially offset by an increase in
dollars per transaction.
Fellow teen retailer Buckle Inc. (BKE) posted a 1.1% decline,
when a 2.7% drop was estimated.
Write to Karen Talley at karen.talley@dowjones.com
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