With winter storms blanketing major parts of the U.S. in recent weeks, apparel retailers on Thursday reported mixed same-store sales for the month of February. Significantly colder weather than last year throughout the country dampened demand for Spring merchandise.
While mall fixtures Limited Brands Inc. (LTD) and Wet Seal Inc. (WTSLA), as well as Buckle Inc. (BKE) reported increases in comparable store sales for the month, Stein Mart, Inc. (SMRT) and Destination Maternity Corp. (DEST) had more difficulty clearing shelves.
According to figures released Wednesday by MasterCard Inc.'s (MA) consulting unit MasterCard Advisors, clothing sales for February declined 1.8% in the month from last year. However, apparel sales were at stronger prices than a year ago, indicating retailers did not have to resort to sharp discounts, according to MasterCard. Consumers are seen starting to spend a little more, compared to the year-ago period, when retail sales and consumer confidence fell to an all-time low amid the recession.
Comparable store sales, or sales at stores open at least a year are seen as a key indicator of a retailer's health because they measure growth from existing stores rather than newly opened ones. February, sandwiched between post-holiday clearance and spring, is the second-least important month of the year for retailers, after January.
Columbus, Ohio-based Limited Brands' total comparable store sales for February grew 10%, compared to a 7% decline in the year-ago period, and in line with the company's own projections. While reporting its financial results for the fourth quarter in late February, the company said it expects to report a same-store sales increase for February in the high single to low double digit range, compared to its prior estimate of roughly flat.
The company's net sales for the month were $600.1 million, up 9.5% from $547.8 million in the prior-year period.
Comparable store sales for Victoria's Secret Stores were up 10%, compared to a 9% decline in the prior-year period. Bath & Body Works comparable store sales recorded an 11% increase, compared to a 3% decline in the prior-year period. La Senza comparable store sales increased 1%, compared to a 12% decrease in the prior-year period.
As at February 27, 2010, Limited Brands operated 2,970 stores, including 1,040 Victoria's Secret Stores, 257 La Senza stores, 1,627 Bath & Body Works stores, 11 Henri Bendel stores, 31 Bath & Body Works Canada stores and 4 Victoria's Secret Canada stores.
In late February, the company had reported net sales for the fourth quarter of $3.06 billion, up from $2.99 billion in the same period of the prior year. Same-store sales for the quarter increased 1%.
Foothill Ranch, California-based Wet Seal Inc. said its same-store for February rose 4.7%, compared to a 6.6% decline in the previous year. Meanwhile, net sales for the month were $42.7 million, up 7.4% from the same period last year.
Comparable store sales at the company's namesake Wet Seal stores increased 3.4% in February, compared to a 5.6% decrease in the year-ago period. Comparable store sales at Arden B were up 12.4%, compared to a 11.5% drop in the prior-year period.
Net sales for the month at Wet Seal stores increased 7.3% from the same period last year to $35.8 million, while net sales at Arden B grew 7.6% to $6.9 million.
Ed Thomas, chief executive officer of Wet Seal said, "At Wet Seal, slightly higher inventories versus last year, especially in denim, and an improved inventory mix across all major categories, led to our positive results. At Arden B, our February results reflect a strong inventory position that is well-aligned with the lower-price strategy we first implemented in January 2009."
Kearney, Nebraska-based Buckle Inc. reported a 5.1% increase in comparable store net sales for February. Net sales for the month rose 9.7% to $69.4 million from $63.3 million in the year-ago period.
Jacksonville, Florida-based Stein Mart Inc. said its comparable store sales for the month of February were down 11.4%. Net sales for the month were $74.5 million, down from $84.1 million in the corresponding period last year.
The company noted that ladies' casual sportswear, ladies' Boutique, and dresses posted positive comparisons in February, while the most difficult business continued to be ladies' career fashion. The company added that all its geographic regions recorded declines in comparable store sales. Meanwhile, sales in the last weather-affected markets of Florida, California and Arizona were considerably better than the company trend.
Stein Mart said it will announce its financial results for the fourth quarter on Thursday, March 18, 2010.
Maternity apparel retailer Destination Maternity Corp. reported a 9.3% decline in comparable store sales for the month of February that was negatively impacted by having one less day than the same period of the prior year. Net sales for the month declined 1.4% to $42.1 million from $42.7 million in the previous-year period.
The Philadelphia-based retailer's February comparable store sales declined 9.3%, compared to a 3.5% decrease last year on a reported basis. After adjusting for an extra day of sales in February 2008 due to the leap year, comparable tore sales for the latest month increased about 0.2%.
The decrease in net sales for the month was primarily due to the decrease in comparable store sales. This was partially offset by increased sales from the company's leased department relationships, including sales due to the re-launch of the exclusive Two Hearts Maternity collection in Sears and Kmart stores in October 2009, increased Internet sales and increased international sales.
Ed Krell, Chief Executive Officer of Destination Maternity, said, "Our sales for February were significantly hurt by the severe snowstorms which hit several regions of the U.S. during the month, as well as the significantly colder weather than last year throughout most of the U.S. which dampened demand for Spring merchandise. We believe our February sales results also reflect the negative effect of the continued difficult overall retail environment, and our relatively strong comparable store sales last February, up approximately 0.2% after adjusting for the 2008 leap year impact, especially compared to most apparel retailers."
During February 2010, the company did not open or close any stores. As of the end of February 2010, the company operated 711 stores, 978 leased department locations and 1,689 total retail locations, compared to 736 stores, 354 leased department locations and 1,090 total retail locations operated at the end of February 2009.
The increase in leased department locations at the end of February 2010 compared to the year-ago period predominantly reflects the opening of 623 Sears and Kmart leased department locations in connection with the October 2009 re-launch of the Two Hearts Maternity collection.
In Thursday's regular trading session, LTD is trading at $22.84, up $0.19 or 0.84% on a volume of 60,000 shares, while WTSLA is trading at $4.30, up $0.19 or 4.62% on a volume of 94,297 shares, and BKE is trading at $32.15, up $1.76 or 5.79% on a volume of 0.50 million shares.
DEST is trading at $24.37, up $0.21 or 0.87%, and SMRT is trading at $8.43, down $0.05 or 0.59% on a volume of 6,255 shares.
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