US apparel retailers see sales soften in April
After the warmer weather and early Easter helped US apparel retailers to higher same-store sales in March, it was perhaps not surprising there would be a slowdown in April.
Add in tough comparisons with the same month last year, which was in turn boosted by a late Easter, and it's easy to see why many US retailers fell short of expectations. Rising gas prices and other economic concerns, including weak job and income growth coupled with stubbornly high gas costs, continue to force consumers to make tough choices.
Overall, though, "the tone is slightly softer than recent months, but on a two-month basis remains relatively steady with its year-to-date trend," the International Council of Shopping Centers (ICSC) believes.
Its tally of US chain store retailers showed a 0.6% year-on-year rise in April compared with a 4.1% rise in March. Excluding drug stores, the pace rose 2.4% in April versus a gain of 6.8% in March.
After last month hailing the early warm weather for drawing attention to its "outstanding assortments of fresh spring goods," Macy's president and CEO Terry Lundgren summed up the challenge facing the department store retailer in April.
"April sales were planned to be weaker than in March, given the calendar shift in which the pre-Easter period fell into March this year versus April last year," he said. "Moreover, April 2012 sales were disadvantaged by a Mother's Day that is later in May this year." Macy's same-store sales edged up just 1.2% in April, versus 7.3% in March.
This year Easter fell two weeks earlier than last year, which helped retailers by pulling sales forward into March. Because of this shift, many commentators believe the best measure of performance is the combined sales for the two months of March and April.
On a two-month basis to smooth out the impact of Easter, the ICSC said comparable-store sales rose by 2.4% in total, and 4.6% without drug stores.
Missing the mark were Target Corp (whose same-store sales were up 1.1% compared with a year ago) and Saks (up 2%), whereas falls were seen at Gap Inc (down 2%), Wet Seal (down 9.6%) and Kohl's (down 3.5%).
On the other hand, TJX Cos Inc (up 6%) and Victoria's Secret parent Limited Brands Inc (up 6%) beat estimates. Other winners included teen clothier Zumiez (up 10.1%), upscale department store Nordstrom (up 7.1%) and discounter Ross Stores (up 7%).
If there is some consolation to be had, it's that retailers seemed to have reverted to fewer promotions than a year ago. And of course there are also hopes that the return of warmer, seasonal weather will help drive sales of summer merchandise in the next couple of months.
Companies: Macy’s Inc, Target Corporation, Saks Incorporated, Gap Inc, Wet Seal Inc, Kohl’s Corporation, TJX Companies Inc, Victoria’s Secret, Limited Brands, Zumiez Inc, Nordstrom Inc, Ross Stores Inc
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