US retailers on Thursday reported mixed February sales at established stores, impacted by payroll tax increase, rising gas prices, and delayed income tax refunds.
Sales during the month were aided primarily by Valentine's Day and Presidents Day sales promotions. Cooler weather and a snowstorm in the Northeast during the month put a damper on spending.
Limited Brands, Stein Mart, TJX reported sales increases, while Buckle, Ross Stores, Cato, and Zumiez reported declines. The results were largely higher than analysts' estimates, while Zumiez, and Ross Stores missed.
Top retailers, including Macy's, Inc. (M), Target Corp. (TGT), Kohl's Corp. (KSS) and Nordstrom, Inc. (JWN) stopped reporting monthly comps starting in February. Abercrombie & Fitch Co. (ANF) and American Eagle Outfitters, Inc. (AEO) had stopped reporting monthly sales earlier. Meanwhile, Gap, Inc. (GPS) will report monthly sales after market close now on.
Despite February being normally the slowest month for retailers following the most important holiday season sales rush, sales were robust due to the surprise rebound in consumer confidence.
A report released from the Conference Board a week ago showed a substantial rebound in U.S. consumer confidence in the month of February, with fiscal cliff uncertainty and worries about the impact of an increase in payroll taxes waning. The consumer confidence index jumped to 69.6 in February from a revised 58.4 in January. Economists had been expecting the index to climb to 61.0 from the 58.6 that had been reported for the previous month.
The much bigger than expected rebound by the consumer confidence index came after it fell to its lowest level in over a year in January.
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 the retailer's comparable store sales to increase 3.3 percent in February.
Apparel retailer Limited Brands, Inc. (LTD), the operator of Victoria's Secret and Bath & Body Works chains, said its February comparable store sales rose 3 percent, reflecting strength in Victoria's Secret Stores and La Senza chains. The result topped Street expectations for a 2.6 percent growth. Net sales were $712.7 million, up from $653.9 million last year.
Another teen apparel retailer, Buckle, Inc. (BKE) announced a 1.1 percent decline in comparable store net sales for the month of February, beating analysts' expectations for 2.7 percent drop. However, net sales increased 2.9 percent to $89.3 million from last year.
Off-price retailer TJX Cos., Inc. (TJX) reported that February comps were up 1 percent, topping Street estimates for a 0.4 percent increase. Total sales increased 7 percent from last year to $1.8 billion.
Another discount retailer, Ross Stores, Inc. (ROST) said February same-store sales decreased 1 percent, missing Street estimates for a growth of 1.1 percent. Total sales rose 3 percent to $728 million from a year ago.
Michael Balmuth, Vice Chairman and CEO, commented, "We believe the slight decline in February same store sales was mainly due to the delay in income tax refunds. With sales improving as the month progressed, we continue to forecast same store sales in March and April to be down 1% to 2% and up 5% to 6%, respectively.
Stein Mart, Inc. (SMRT) reported a 0.6 percent increase in its comparable store sales for the month of February, while analysts were expecting sales to be flat. Total monthly sales also grew 5.6 percent to $85.2 million from the prior-year month.
"I am pleased with our February sales performance, given the unfavorable impact of weather on certain regions and the change in our 12-hour event. While sales were down early in the month due to our replacing the February 12-hour event with a much smaller promotion, they were good overall," said Jay Stein, Interim CEO.
Meanwhile, value-priced fashion apparel retailer Cato Corp. (CATO) reported that February same-store sales were down 3 percent, while total sales increased 1 percent from last year to $84.7 million.
"February sales reflect the continuing difficult economic environment. We did see some beneficial impact from the delay in tax refunds from January," stated John Cato, chairman, president, and CEO.
Another specialty retailer of action sports related apparel, footwear, equipment and accessories Zumiez, Inc. (ZUMZ) also reported Wednesday that its comparable store sales for February decreased 8.9 percent, significantly missing analysts' expectations for a 1.9 percent decline. Total net sales grew 10.6 percent from last year to $44.5 million.
by RTT Staff Writer
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