March sales were uneven for retailers


March was an inconsistent month for U.S. retailers.

Wal-Mart Stores Inc. and May Department Stores Co. were among those posting disappointing sales, while Federated Department Stores Inc. and Target Corp. did better than expected.

The nation's retail chains, expected to post a 4.4 percent rise in sales at stores open at least a year, logged a 3.9 percent increase, according to the Thomson Same Store Sales Index. The index tracks analysts' estimates and final results for 68 merchants.

"Consumers are still out spending, but cautiously," said Thomson Financial retail analyst Rachel Schechter.

Leading the pack last month were teen-oriented retailers. Abercrombie & Fitch's sales rose 21 percent, far exceeding the 12.6 percent improvement that analysts expected.

Other retailers with better-than-expected numbers included AnnTaylor Stores Corp., Costco Wholesale Corp. and Nordstrom Inc.

"The theme that I've noticed is that teen retailers are paving the way for some great results," while department stores, which tend to attract older shoppers, put in a more mixed performance, Schechter said.

Even some upscale retailers, including Neiman Marcus Group Inc., which have benefited in recent months from the improving economy, had a weak month.

Other March underperformers included J.C. Penney Co. Inc., whose sales fell far short of estimates, and discount department store operator Kohl's Corp., which had an unexpected drop in business.

Overall, Wall Street saw fewer pleasant surprises in March than in February, when 80 percent of the retailers tracked by Retail Metrics, a Boston research firm, exceeded estimates and 18 percent missed expectations. In March, 48 percent of the retailers beat expectations and 51 percent missed them.

"While there was no significant mention of higher gas prices impacting consumers, several months of rising prices, coupled with a stagnant job market and rising interest rates, may be putting the squeeze on lower- and middle-income consumers," said Ken Perkins, president of Retail Metrics.

At least 15 retailers, including Pier 1 Imports Inc., blamed the weather for at least some of their shortcomings, he said.

Gap Inc. and Limited Brands Inc. were among other retailers that stumbled.

In the luxury market, Neiman Marcus and Saks Inc. reported higher sales, but the gains fell short of forecasts. Neiman Marcus had a 3.4 percent same-store gain, and Saks notched a 2.3 percent same-store increase.

The world's biggest retailer, Wal-Mart, was expected to log a 4.4 percent rise in sales but missed by 0.1 point, growing 4.3 percent because of sluggish growth at its Sam's Clubs. Wal-Mart, which has annual sales of about $285.2 billion, also gave guidance that first-quarter earnings would be at the low end of its target range.

Wall Street didn't punish Wal-Mart much. The chain's stock lost 1.2 percent to $48.90 a share yesterday.

The 43-year-old company has been attempting to play down the importance of same-store sales, pointing out that its aggressive plan of opening stores - boosting its square footage about 8 percent annually - is compensating for slower growth in its established stores.

Same-store sales - sales at stores open at least a year - are considered the most accurate gauge of a retailer's performance. Wal-Mart's total sales for the month rose 11.3 percent.

During a two-day media conference this week, Wal-Mart Chief Financial Officer Thomas M. Schoewe said same-store sales are important but don't tell the whole story.

He told of Kissimmee, Fla., where Wal-Mart once had a supercenter doing $100 million in annual sales. Today, Wal-Mart has six supercenters in the area, each doing $80 million in annual sales, for a total of $480 million, Schoewe said.

At May Department Stores, the parent of Marshall Field, Filene's, Hecht's and Lord and Taylor, same-store sales fell 10.8 percent, hurt by shifting a major sales promotion to April from March. Analysts had expected a 3.9 percent drop at May. Field isn't included in those numbers because it was acquired by May Department Stores in July.

Federated, which plans to acquire May, reported a 3.4 percent increase in sales. Analysts had expected a 2.4 percent gain.

Sears Holdings Corp., the company formed after the March 24 merger of Sears, Roebuck and Co. and Kmart Holding Corp., didn't report monthly numbers.

The new company's chairman, Edward S. Lampert, didn't report monthly sales while heading Kmart and is not expected to do so with Sears Holdings.

The Chicago Tribune is a Tribune Publishing newspaper. The Associated Press contributed to this article.

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad