US retailers on Thursday reported modest March sales at established stores, impacted by cold weather and the unfavorable impact of an early Easter.
Many shoppers postponed spring clothing purchases as March was the coldest since 1996, and also the snowiest March since 2002.
Though the Easter holiday shift hurt March sales, it is expected to provide a positive impact in April sales results compared to last year.
Limited Brands (now known as L Brands), Ross Stores and Zumiez reported sales increases, while TJX, Stein Mart and Cato reported declines, with Buckle sales remaining flat. The results were largely higher than analysts' estimates, while TJX and Stein Mart missed.
Despite March being normally the start of the spring apparel season for retailers, sales were modest as higher payroll taxes continued to hamper consumer spending.
A report released from the Conference Board two weeks ago showed a notable deterioration in U.S. consumer confidence in the month of March, with across-the-board government spending cuts creating uncertainty regarding the economic outlook. The consumer confidence index fell to 59.7 in March from a revised 68.0 in February. Economists had expected the index to dip to 67.5 from the 69.6 originally reported for the previous month.
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 1.8 percent in March, lower than the 2.9 percent increase in March 2012.
Apparel retailer L Brands, Inc. (LTD), the operator of Victoria's Secret and Bath & Body Works chains, said its March comparable store sales rose 3 percent, reflecting strength across its three brands. The result topped Street expectations for flat sales. Net sales were $894.8 million, up 6 percent from $840.9 million last year.
Another teen apparel retailer, Buckle, Inc. (BKE) announced that comparable store net sales for the month of March were flat, beating analysts' expectations for 0.3 percent drop. However, net sales increased 1.1 percent to $106.7 million from last year.
Off-price retailer TJX Cos., Inc. (TJX) reported that March comps were down 2 percent, missing Street estimates for only a 1.0 percent decline. Total sales increased 5 percent from last year to $2.4 billion.
Another discount retailer, Ross Stores, Inc. (ROST) said March same-store sales increased 2 percent, beating Street estimates for a decline of 1.2 percent. Total sales rose 6 percent to $1.04 billion from a year ago. Looking ahead, the company continues to forecast a 5 to 6 percent increase in April comparable store sales.
Michael Balmuth, Vice Chairman and CEO, commented, "March same store sales outperformed our guidance for a 1% to 2% decline and were on top of exceptionally strong prior year comparisons. As a reminder, these results were impacted by the holiday calendar shift, with Easter Sunday store closures occurring in March this year versus April last year."
Stein Mart, Inc. (SMRT) reported a 2.8 percent decline in its comparable store sales for the month of March, while analysts were expecting a 0.5 percent increase. However, total monthly sales grew 4.3 percent to $133.0 million from the prior-year month.
"March sales were adversely impacted by much colder weather compared to last year and, of course, the lost selling day due to the earlier Easter which represents nearly two percentage points of the comp sales decrease. Our comparable store sales were positive until the last week of the month when the anticipated lower post-Easter selling occurred," said Jay Stein, Interim CEO.
Meanwhile, value-priced fashion apparel retailer Cato Corp. (CATO) reported that March same-store sales were down 11 percent, while total sales increased 2 percent from last year to $105.6 million.
"March sales continued to be difficult. The Easter selling season, which is historically our strongest quarter, continued to see a declining trend in sales. This was compounded by the colder weather compared to last year's unusually warm March," 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 March increased 2.1 percent, significantly topping analysts' expectations for a 7.5 percent decline. Total net sales also grew 19.7 percent from last year to $61.0 million.
Just a reminder that top retailers, including Macy's, Inc. (M), Target Corp. (TGT), Kohl's Corp. (KSS) and Nordstrom, Inc. (JWN) have 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.
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