March 28, 2024

Retail Sales Rise, but Below Forecasts

Sales at discount stores increased 7.8 percent in May, the best showing by any group of retailers in terms of sales last month, according to a survey of 25 retailers released on Thursday.

But sales at stores that have been open at least a year, known as same-store sales, compiled by Thomson Reuters, rose 4.9 percent in May, slightly below the 5.4 percent that analysts had forecast. It was also below the 8.9 percent growth in April, which was one of the biggest increases in the index in the last few years.

Analysts said the May figures reflected the continued pressures on consumers from an uncertain jobs market, a depressed housing sector and the recent rise in gasoline prices.

Sherif Mityas, a partner in the retail practice at A. T. Kearney, a global management consulting firm, called the results “a bit underwhelming.”

He added: “In totality we are still seeing significant headwinds from a consumer confidence perspective,” he said. “You are seeing that show up in consumer retail sales.”

The monthly survey of same-store sales is used as a gauge for buoyancy in the retail sector and the strength of consumers. It was released a day before the Labor Department’s monthly report on the jobs market. Analysts are forecasting an unemployment rate of 8.9 percent, down from 9 percent, and the addition of 170,000 jobs in May, although other jobs data this week has raised some concerns about whether those expectations will be met.

Economists said higher food and gasoline prices, although they have been moderating recently, have taken their toll on retailers. With some people out of work and a depressed housing market, “people are feeling less confident about where their money is going,” Mr. Mityas said.

“The American consumer is still unfortunately focused on their needs when they open their wallet,” he said.

Still, the Thomson Reuters survey also suggested that while discount consumers were seeking bargains, more affluent consumers were feeling less of a pinch. Retail sales at department stores rose 3.8 percent, but that was below the 4.5 percent increase expected. Apparel for teenagers did well, climbing 4.5 percent, slightly above expectations of 4.2 percent.

Another survey, from the International Council of Shopping Centers, released on Thursday found a gain of 5.4 percent in May retail sales from May 2010.

Neither survey includes Wal-Mart.

Chris G. Christopher Jr., the senior principal economist for IHS Global Insight, said: “The fact that luxury stores are plowing ahead gives some credence to suspicions that the high-end American consumer is pulling out of the recession relatively well, while the rest are having their incomes swallowed up by higher food and gasoline prices.

“In addition, shoppers are increasingly shopping for clothing from discount stores and staying away from the more expensive apparel outlets,” he said.

The Thomson Reuters survey accounts for sales in the four weeks through May 28. It quoted some retailers as saying that unseasonably cool and wet weather in the beginning of the month hurt traffic, but as the weather turned warmer near the end of the month, business picked up.

Same-store sales at Saks jumped 20.2 percent in May. In a statement, Saks said that a four-day sales event helped push up May’s results.

Costco was also strong, with a 13 percent rise.

Macy’s reported same-store sales were up 7.4 percent. The department store chain said in a statement that it was raising its guidance to a 5 percent increase in same-store sales for the second quarter from the previous estimate of about 4 percent.

Macy’s includes online sales in its same-store sales calculations.

Mr. Mityas said Saks and Macy’s were pursuing consumers with better pricing and merchandising. “They are clearly setting the bar,” he said.

Nordstrom said sales were up 7.4 percent.

Among the companies that missed forecasts by the biggest margins were Destination Maternity, which showed same-store sales declining 8.6 percent, worse than the decline of 1 percent forecast by analysts.

Same-store sales at J. C. Penney, which had been expected to show a 3.3 percent rise, fell 1 percent.

Gap and Stage Store also fell short of forecasts.

The teenage apparel retailers Buckle and Zumiez beat expectations, with same-store sales rising 8.8 percent and 7.8 percent, respectively, in May.

Article source: http://feeds.nytimes.com/click.phdo?i=b2e2aa0c156916828ae17bb57eb3f74e

A Robust Rise in April’s Retail Sales Comes With a Hint of Concern

Sales at stores open at least a year, a measure of retail buoyancy known as same-store sales, increased 8.9 percent on average in April, according to Thomson Reuters’ tracking of 25 retailers. That was one of the biggest increases in the last few years, and it topped analyst expectations of 8.2 percent.

Chris Donnelly, a senior executive in the retail practice at Accenture, said the results were good but no one should get carried away.

“It was expected to be a big jump — if you look at analyst expectations, and even the companies’ own expectations,” he said, “and frankly, some companies didn’t jump as much as they were expected to do.”

Even so, the companies that missed forecasts by the biggest margin — Kohl’s, Saks Fifth Avenue and J. C. Penney — still posted good results. Kohl’s same-store sales increased 10.2 percent, compared with analyst estimates of 15.1 percent. Sales at Saks rose 5.8 percent, compared with estimates of 10.3 percent. And J. C. Penney increased 6.4 percent; analysts had expected 8.5 percent.

“Everyone’s pretty happy that April turned out so well, but looking forward, there’s still a lot of concern,” Mr. Donnelly said, noting that gasoline prices and raw material costs are rising sharply.

Gasoline prices are up about 30 percent so far this year — close to an average of $4 a gallon — and retailers are trying to figure out the impact if prices stay there or continue to rise. Higher gas prices tend to affect traffic at physical stores.

“When the national average price of gasoline exceeds $3.20 a gallon, that’s when we start to see indications of change,” said Michael McNamara, vice president for research and analysis at SpendingPulse, which also tracks gas sales. “People pump fewer gallons, and drive less, and that tends to have impact on retail because people cut back on Saturday driving.”

Stage Stores, which reported results on Thursday, said its first-quarter sales increase of just 0.2 percent was damped by gas prices.

“Rising gas prices made for a more cautious consumer,” Andy Hall, president and chief executive, said in a statement.

Last week, Wal-Mart’s chief executive, Michael T. Duke, issued the same warning. “There’s no doubt that rising fuel prices are having an impact on our customers,” Mr. Duke said at an event in New York. “There’s more pressure.” The sharp drop in oil prices over the last four days has not yet begun to affect prices at the gasoline pump, but if sustained, it could provide relief.

Three of the midrange department stores reporting sales on Thursday had some of the best results, with Macy’s, Dillard’s and Kohl’s all posting increases of same-store sales between 10.2 and 11 percent.

The companies attributed the increase in large part to Easter coming in late April, as opposed to last year when most of the Easter-related shopping occurred in March.

Even so, comparing combined March and April results from this year to last year, the stores were improving. Dillard’s, for instance, said its combined March and April same-store sales were up 4 percent over 2010, and Macy’s said the combined months’ results were up 5.3 percent this year over last.

Limited Brands had an increase of 20 percent for all its brands, bolstered by a 25 percent increase at its Victoria’s Secret unit. Analysts had expected a 12.2 percent increase for Limited over all, and a 16.3 percent increase at Victoria’s Secret.

The Limited said in a recorded message that pretty much everything at Victoria’s Secret was performing well, from yoga shorts to new packaging for its fragrances. It also increased its earnings guidance for the second quarter, to 37 to 39 cents a share, up from its previous guidance of 26 to 31 cents a share.

Gap Inc. had one of the most surprising results.

Gap’s sales have been faltering so badly that when Thomson Reuters reports same-store sales for the apparel category, it also includes a number that excludes Gap, to more accurately reflect where the majority of stores are. On Thursday, Gap Inc. announced that it had dismissed its head designer for the Gap brand, Patrick Robinson. Three months ago, it dismissed the Gap brand’s top business-side executive.

In April, however, Gap posted an 8 percent increase in same-store sales in a month analysts had expected a 0.8 percent decrease. The Old Navy and Banana Republic divisions pushed that increase, rising by 14 and 11 percent respectively. But the Gap unit was also in positive territory for the first time in 2011, with an increase of 2 percent.

Spending in the apparel sector over all increased 10.4 percent in April as compared with April a year ago, according to MasterCard Advisors SpendingPulse, which estimates sales from cash, check and credit cards.

“Sectors like apparel had a significant Easter bump, and they are really inflating the growth rate,” Mr. McNamara of SpendingPulse said.

E-commerce sales were up 19.2 percent, according to SpendingPulse, the largest increase since July 2007. And luxury spending continued to be strong, increasing 9.6 percent.

High gas prices can be a boon for e-commerce sales, as customers save gas by having clothing shipped directly to their houses.

“Almost in conjunction with the lower pumping numbers, we’ve seen acceleration of the e-commerce growth,” Mr. McNamara said.

And while high gas prices affect discount stores’ customer base, they also means the stores might attract more affluent customers. Discount stores as a sector had the highest same-store sales increase in April, rising 12.1 percent, which was 1.3 percent higher than analysts had expected.

“It hurts the spending power of your folks, but at the same time a lot of people tend to trade down,” Mr. Donnelly said.

Article source: http://feeds.nytimes.com/click.phdo?i=4ae8ba988ec36d1a4cfa1b1817dd17b1

Rise in April’s Retail Sales Comes With a Warning

Sales at stores open at least a year, a measure of retail buoyancy known as same-store sales, increased 8.9 percent on average in April, according to Thomson Reuters’ tracking of 25 retailers. That was one of the biggest increases in the last few years, and it topped analyst expectations of 8.2 percent.

Chris Donnelly, a senior executive in the retail practice at Accenture, said the results were good but no one should get carried away.

“It was expected to be a big jump — if you look at analyst expectations, and even the companies’ own expectations,” he said, “and frankly, some companies didn’t jump as much as they were expected to do.”

Even so, the companies that missed forecasts by the biggest margin — Kohl’s, Saks Fifth Avenue and J. C. Penney — still posted good results. Kohl’s same-store sales increased 10.2 percent, compared with analyst estimates of 15.1 percent. Sales at Saks rose 5.8 percent, compared with estimates of 10.3 percent. And J. C. Penney increased 6.4 percent; analysts had expected 8.5 percent.

“Everyone’s pretty happy that April turned out so well, but looking forward, there’s still a lot of concern,” Mr. Donnelly said, noting that gasoline prices and raw material costs are rising sharply.

Gasoline prices are up about 30 percent so far this year — close to an average of $4 a gallon — and retailers are trying to figure out the impact if prices stay there or continue to rise. Higher gas prices tend to affect traffic at physical stores.

“When the national average price of gasoline exceeds $3.20 a gallon, that’s when we start to see indications of behavior change,” said Michael McNamara, vice president for research and analysis at SpendingPulse, which also tracks gas sales. “People pump fewer gallons, and drive less, and that tends to have impact on retail because people cut back on Saturday driving.”

Stage Stores, which reported results on Thursday, said its first-quarter sales increase of just 0.2 percent was damped by gas prices.

“Rising gas prices made for a more cautious consumer,” Andy Hall, president and chief executive, said in a statement.

Last week, Wal-Mart’s chief executive, Michael T. Duke, issued the same warning. “There’s no doubt that rising fuel prices are having an impact on our customers,” Mr. Duke said at an event in New York. “There’s more pressure.”

Three of the midrange department stores reporting sales on Thursday had some of the best results, with Macy’s, Dillard’s and Kohl’s all posting increases of same-store sales between 10.2 and 11 percent.

The companies attributed the increase in large part to Easter coming in late April, as opposed to last year when most of the Easter-related shopping occurred in March.

Even so, comparing combined March and April results from this year to last year, the stores were improving. Dillard’s, for instance, said its combined March and April same-store sales were up 4 percent over 2010, and Macy’s said the combined months’ results were up 5.3 percent this year over last.

Limited Brands had an increase of 20 percent for all its brands, bolstered by a 25 percent increase at its Victoria’s Secret unit. Analysts had expected a 12.2 percent increase for Limited over all, and a 16.3 percent increase at Victoria’s Secret.

The Limited said in a recorded message that pretty much everything at Victoria’s Secret was performing well, from yoga shorts to new packaging for its fragrances. It also increased its earnings guidance for the second quarter, to 37 to 39 cents a share, up from its previous guidance of 26 to 31 cents a share.

Gap Inc. had one of the most surprising results.

Gap’s sales have been faltering so badly that when Thomson Reuters reports same-store sales for the apparel category, it also includes a number that excludes Gap, to more accurately reflect where the majority of stores are. On Thursday, Gap Inc. announced it had dismissed its head designer for the Gap brand, Patrick Robinson. Three months ago, it dismissed the Gap brand’s top business-side executive.

In April, however, Gap posted an 8 percent increase in same-store sales in a month analysts had expected a 0.8 percent decrease. The Old Navy and Banana Republic divisions pushed that increase, rising by 14 and 11 percent respectively. But the Gap unit was also in positive territory for the first time in 2011, with an increase of 2 percent.

Spending in the apparel sector over all increased 10.4 percent in April as compared with April a year ago, according to MasterCard Advisors SpendingPulse, which estimates sales from cash, check and credit cards.

“Sectors like apparel had a significant Easter bump, and they are really inflating the growth rate,” Mr. McNamara of SpendingPulse said.

E-commerce sales were up 19.2 percent, according to SpendingPulse, the highest increase since July 2007. And luxury spending continued to be strong, increasing 9.6 percent.

High gas prices can be a boon for e-commerce sales, as customers save gas by having clothing shipped directly to their houses.

“Almost in conjunction with the lower pumping numbers, we’ve seen acceleration of the e-commerce growth,” Mr. McNamara said.

And while high gas prices affect discount stores’ customer base, it also means they might attract more affluent customers. Discount stores as a sector had the highest same-store sales increase in April, rising 12.1 percent, which was 1.3 percent higher than analysts had expected.

“It hurts the spending power of your folks, but at the same time a lot of people tend to trade down,” Mr. Donnelly said.

Article source: http://feeds.nytimes.com/click.phdo?i=4ae8ba988ec36d1a4cfa1b1817dd17b1