The pickup in April retail sales is seen as encouraging

The pickup in April retail sales is seen as encouraging

Improving weather in late April, combined with rising stock and housing prices, offered some encouragement to US clothing retailers as sales gained over the month.

US chain store sales grew 2.7% during April, according to the International Council of Shopping Centers (ICSC). 

"April's pickup in sales is encouraging," said Michael Niemira, vice president of research and chief economist for ICSC. "It is most likely being boosted by a stronger household wealth effect from higher home and stock market prices."

He added: "Although it was an improvement on recent months, the pace was still dampened by adverse seasonal weather. However, it is encouraging that sales still performed well despite this weather drag."

Meanwhile, Retail Metrics said overall same-store sales rose 2.8% during the month. This was an improvement on the 1.5% recorded in March but down on the 4.2% increase in February, and 4.5% growth in January.

Retail Metrics president Ken Perkins was more downbeat on the performance. "The results look to be particularly modest given retailers had an extra Sunday selling day due to the Easter holiday shift out of April this year into March," he said.

"Weak drug store sales results, inclement weather, soft economic data in the first half of the month, and sequestration concerns were the primary culprits." 

However, he emphasised that the results could have been worse, with no retailers revealing negative warnings, despite many investors' fears, given the persistently cold weather during the month.

Perkins said that May has the "potential to be much better" as the employment picture is improving, and coming on the heels of a decent non-farm payroll last week.

"Stocks are at record highs and the housing market continues to recover. The Fed continues to be very accommodative and mother nature is finally cooperating with warmer weather".

Winners and losers
The retailers recording the greatest gains included off-price retailers TJX and Ross Stores, while Stein Mart also posted strong gains.

All of the other retailers, bar Cato Corp, posted sales growth over the month. Cato lowered its first quarter forecast on the results, with sales falling 9% to $77m.

"The shift of Easter from early April last year to late March this year favourably impacted April sales, while March sales were unfavourably impacted," the company said.

"Because of this shift, the best measure for performance is the combined sales for the two months, which decreased 3% overall and were down 6% to the prior year on a same-store basis."

TJX and Ross Stores saw comparable sales growth of 9% and 7% respectively. TJX CEO Carol Meyrowitz said: "Customer traffic drove comp increases at all divisions, as consumers responded to our extremely fresh selections of branded spring apparel."

Gap also recorded a 7% increase in comparable sales over the month. Chairman and CEO Glenn Murphy said: "We are pleased with our sales performance this month, led by our largest brands, Gap and Old Navy."

US retailers' March 2013 sales roundup
L Brands, the temporary name for Victoria's Secret owner Limited Brands, saw sales increase 2% during April. The company said sales reached US$660.5m from $659m in the same period of the prior year. The company added that margin was down on the prior year.

TJX reported gains over the month, with sales rising 9% to $2bn. Comparable store sales increased 2%. The company said its performance was at the "high end" of its expectations.

Off-price retailer Ross Stores said comparable store sales growth was better than expected, rising 7% over the month. Overall sales grew 12% to $778m. As a result, the company increased its fourth quarter forecast.

Action sportswear and footwear retailer Zumiez recorded a 4.6% comparable sales increase, with consolidated sales growing 12.1% to $43m.

Discount retailer Stein Mart said comparable sales increased 8% over the month, with linens, career sportswear, and ladies' casual sportswear posting the strongest sales gains. Overall sales grew 1.6% to $99.2m. "As you know, our February and March sales were impacted by colder weather and the Easter calendar shift. Now that we are seeing warmer weather, our customers are responding well to our spring merchandise and we are truly satisfied with what this has done for our sales," said CEO Jay Stein.

Value-priced fashion retailer Cato Corporation said sales fell 9% over the month to $77m, but increased 1% on a comparable basis. The company said the combined sales for March and April were below expectations, and now expects first quarter earnings per share to decline 5-6% on the same period of last year.

Denim specialist The Buckle recorded a 6.2% increase in comparable store sales during April. Net sales grew 3.1% to $73.8m.

And at Gap Inc, comparable sales climbed 7% during the month. Overall sales grew 5.2% to reach $1.21bn. The company said the growth was led by its largest brands - Gap and Old Navy.