U.S. retailers mostly reported higher same-store sales for the month of March as shoppers welcomed unusually warm weather by snapping up spring apparel.
This year's early Easter also helped boost sales, as consumers continued to spend despite high gasoline prices taking a bite out of their discretionay expenditures.
Big-box retailer Target Corp. reported same-store sales that beat analysts' expectations, and raised its outlook for first-quarter earnings.
Several mall fixtures, including TJX, Gap, Ross Stores, Nordstrom, Saks, and Macy's reported robust sales. Buoyed by the strong March sales results, some of the retailers raised their earnings outlook for the first quarter.
Meanwhile, Limited Brands reported higher same-store sales, but said that net sales declined from last year.
And teen retailer Wet Seal reported same-stores that declined more than expected by analysts.
March sales are likely to be stronger than April as the pre-Easter period falls into March this year compared to April last year. Also, the rising price of gasoline could still cast a shadow on consumer spending, as consumers tire of paying almost $4 a gallon nationally.
Among discount retailers, Minneapolis, Minnesota-based Target Corp. (TGT) reported a 7.3 percent increase in comparable store sales for March, topping analysts' expectations of 5.4 percent growth. Total monthly net retail sales grew 7.9 percent to $6.43 billion.
Gregg Steinhafel, chairman, president and chief executive officer of Target Corp. said, "March sales were well above our expectations, reflecting a healthy underlying trend combined with the benefit of an earlier Easter and favorable weather this year."
Looking ahead, Target raised its outlook for first-quarter comparable-store sales to increase 5 to 6 percent from the prior forecast for an increase of about 4 percent. The outlook reflects a low to mid single-digit increase in the company's April comparable-store sales.
Target also raised its adjusted earnings outlook for the first quarter to a range of $1.04 to $1.10 from the prior range of $0.97 to $1.07. The company now expects reported earnings per share of $0.96 to $1.02, up from the prior range of $0.88 to $0.98.
On average, 22 analysts polled by Thomson Reuters expect the company to report earnings of $0.97 per share for the first quarter. Analysts' estimates typically exclude special items.
Another discount retailer Pleasanton, California-based Ross Stores, Inc. (ROST) said March same-store sales increased 10 percent over last year, topping Street estimates for growth of 4.6 percent. Total sales rose 15 percent from the year-ago period to $955 million.
Michael Balmuth, Vice Chairman and CEO of Ross Stores, said, "We are very pleased with our much stronger than expected sales in March. Favorable weather throughout most of our markets, along with our ongoing focus on value, drove broad-based merchandise and geographic sales gains during the month."
The company continues to forecast a 1 percent to 2 percent increase in same store sales for April.
For the first quarter, Ross Stores raised its earnings per share outlook to a range of $0.89 to $0.91 from the prior forecast of $0.82 to $0.86.
The new range represents a projected 20 percent to 23 percent increase over earnings per share of $0.74 in the prior-year period. Analysts expect the company to report earnings of $0.88 per share.
Apparel retailer Limited Brands, Inc. (LTD), the operator of Victoria's Secret and Bath & Body Works chains, said its March comparable store sales rose 8 percent.
The results reflect the continued strength of its Victoria's Secret Stores and Bath & Body Works brands, and exceeded Street expectations of 4.4 percent growth.
However, net sales for the month declined to $840.9 million from $863.0 million in the same period last year.
Another specialty apparel retailer Gap, Inc.'s (GPS) March comparable sales were up 8 percent, including the associated comparable online sales this year, with all its brands reporting positive comparable sales.
This compared with a 10 percent decrease in the year-ago period. Street was looking for an increase of 5.4 percent.
Gap's net sales for the month rose 10 percent to $1.46 billion from $1.33 billion in the year-ago period.
Specialty retailer to young women, Wet Seal, Inc. (WTSLA) stated its comparable sales declined 7.8 percent in the month, while analysts' estimate was for a 6.0 percent decrease. This compares to growth of 4.7 percent in the prior-year period.
Based on brands, the Foothill Ranch, California-based company's March comparable store sales decreased 7.6 percent at Wet Seal and 8.6 percent at Arden B. Net sales for the month declined 5.1 percent to $58.6 million.
Net sales for the month decreased 5.1 percent to $58.6 million.
"For the month, E-commerce sales declined 17%, as we continue our strategic efforts to transition to a higher penetration of full-price selling online and better align merchandising in this channel with our stores," CEO Susan McGalla said in a statement.
Off-price retailer TJX Cos., Inc. (TJX) reported that March comps increased 10 percent, while total sales rose 14 percent from last year to $2.3 billion. Analysts were looking for a 5.3 percent increase in comps.
Carol Meyrowitz, Chief Executive Officer of The TJX Companies, said, "While unusually warm weather was a positive in the month, sales were also strong in regions where the weather is typically warm."
Looking ahead to the first quarter, TJX raised its earnings outlook to a range of $0.51 to $0.52 per share from the prior range of $0.45 to $0.47.
For fiscal year 2013, the company now expects earnings per share of $2.25 to $2.35. Earlier, the company forecast earnings per share from continuing operations of $2.21 to $2.31.
Analysts expect the company to report earnings of $0.48 per share for the first quarter and $2.32 per share for fiscal 2013.
Nordstrom, Inc. (JWN) reported an 8.6 percent rise in same-store sales for March, above analysts' estimate for a 5.8 percent rise. Preliminary total retail sales for the month grew 14.7 percent from last year to $1.03 billion.
Among department store chains, Macy's (M) same-store sales for March increased 7.3 percent over last year, higher than the 4.8 percent growth expected by analysts. Net sales for the month grew 6.9 percent to $2.36 billion. Online sales, macys.com and bloomingdales.com combined, grew 39.0 percent in March.
Terry Lundgren, chairman, president and chief executive officer of Macy's, said, "The early warm weather drew attention to our outstanding assortments of fresh spring goods, which were received enthusiastically by customers."
Based on strong March results, Macy's raised its same-store sales outlook for the combined March-April period to a range of 4.3 percent to 4.5 percent, from the prior forecast for a 3 to 3.5 percent increase.
The new guidance calculates to an expected same-store sales increase in the range of 1 percent to 1.3 percent in April.
The company noted that sales in April are planned to be weaker than in March, given the calendar shift in which the pre-Easter period falls into March this year versus April last year, as well as the cosmetics event shift.
April sales are also expected to be disadvantaged by a Mother's Day that is later in May this year.
For the first quarter, Macy's forecasts same-store sales to increase 4.3 percent to 4.5 percent.
Menomonee Falls, Wisconsin-based Kohl's Corp. (KSS) reported a 3.6 percent increase in comparable sales for March, while Street expected an increase of 2.1 percent. Meanwhile, total sales for the month grew 5.3 percent year-over-year to $1.82 billion.
Kevin Mansell, Kohl's chairman, president and CEO said, "Warmer weather and an earlier Easter combined to help improve our sales trend, especially in certain regions and businesses. The cold weather regions - Midwest, Mid-Atlantic and Northeast - outperformed the company."
Mansell noted that children's apparel, driven by Easter demand, was the strongest business while men's and women's apparel also performed well.
Fashion retail store chain, New York-based Saks, Inc. (SKS) reported that comparable store sales increased 6.3 percent in March, matching analysts' expectations. Total owned sales also grew 6.3 percent from last year to $276.50 million.
Saks noted that the strongest categories in March included women's contemporary apparel, fine jewelry, handbags, and men's accessories, shoes, tailored clothing, and contemporary apparel.
Comparable-store sales or comps is a key retail industry performance metric to gauge activity at store locations that have been open for at least a year.
Analysts polled by Thomson Reuters expected retail sales to rise 3.4 percent in March on top of a 1.8 percent increase in the same month last year.
by RTT Staff Writer
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