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Claims for Unemployment Benefits Increase

July 21, 2011 by Leave a Comment

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 418,000, the Labor Department said.

Economists polled by Reuters had forecast claims rising to 410,000. The prior week’s figure was revised up to 408,000 from the previously reported 405,000.

The claims data covered the survey period for the closely watched nonfarm payrolls count for July. Initial claims dropped 11,000 between the June and July survey periods, suggesting a modest improvement in employment after June’s paltry 18,000-job gain.

A government shutdown in Minnesota following a budget impasse resulted in an additional 1,750 state employees filing claims for jobless benefits last week.

Initial claims have now been above the 400,000 mark for 15 consecutive weeks. A level of 400,000 claims or less is usually associated with a stable labor market.

The four-week moving average of claims, considered a better measure of labor market trends, slipped 2,750 to 421,250.

A total of 7.33 million people were claiming unemployment benefits during that period under all programs, down 159,000 from the prior week.

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Gannett Newspaper Revenue Falls 6.5% in Weak Ad Climate

July 19, 2011 by Leave a Comment

In the latest sign that the industry has yet to recover from an advertising slump, quarterly profit and revenue at the newspaper company Gannett fell.

Gannett, the largest newspaper chain in the United States, said Monday that total revenue was down 2.2 percent to $1.33 billion in the second quarter. The figure was in line with the average analyst forecast, according to Thomson Reuters.

Gannett, which publishes USA Today and 81 other newspapers, said ad revenue at its newspapers dropped 6.5 percent to $646.9 million as retail, automotive and national advertisers pulled back on their spending.

Advertising revenue this quarter is “getting off to the same start” as the second quarter, Gracia Martore, president and chief operating officer of Gannett, said in a conference call.

The company also doubled its quarterly dividend and reinstated its $1 billion share buyback.

Gannett posted a profit of $151.5 million, or 62 cents a share, compared with $195.5 million, or 73 cents a share a year earlier.

Excluding costs for facility closings and job cuts and a net tax benefit, Gannett posted a profit of 58 cents a share, beating analysts’ forecast by a penny.

Gannett cut 2 percent of its work force, or 700 employees, at its American newspaper division in June, citing a sputtering economic recovery weighing down national and local advertising.

Derek Maupin, research analyst at Hodges Capital management, which holds shares in Gannett, is slightly concerned about Gannett’s print advertising but believe shares are still undervalued at its current price. He cited increases in other segments like broadcasting revenue.

At the company’s broadcast division, total revenue inched up to $184.4 million compared with $184 million in the same quarter a year ago.

TV revenue was up slightly to $177.7 million and the company forecast the percentage decline in the third quarter to be in the midsingle digits.

Digital advertising rose almost 13 percent to $173.4 million, the company said.

The company doubled its dividend to 8 cents a share. It expects to repurchase $100 million in shares over the next 12 months, as part of the $1 billion share buyback originally approved five years ago.

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French Court Puts Off Decision in Lagarde Case

July 9, 2011 by Leave a Comment

As Ms. Lagarde prepared to hold her first I.M.F. board meeting on Friday to consider another $3 billion in emergency financing for Greece, the French Court of Justice, which oversees the actions of ministers in office, said it would delay until Aug. 4 a decision on whether to look into her handling in 2007 of a court case involving a French tycoon.

It was the second time in a month that the court had postponed a ruling. A court official said one of the judges had recused himself, Reuters reported. The delay means another month of legal uncertainty hangs over Ms. Lagarde.

“It’s a bit surprising,” said Christopher Mesnooh, a partner in international business law at Field Fisher Waterhouse in Paris. “Given the high-profile conditions under which she replaced her predecessor at the I.M.F., one might have thought the court would have wanted to provide legal certainty today, to allow Madam Lagarde to commence her functions with a clear mind.”

Ms. Lagarde ushered in a new era at the I.M.F. on Tuesday as the first woman to hold the post of managing director, one of the top positions in international finance. She met at the fund’s headquarters in Washington with employees still ruffled by the resignation of her predecessor, Dominique Strauss-Kahn, after he was charged with the sexual assault of a hotel maid in New York. Her contract contains a section on conduct and ethics that requires her to “strive to avoid even the appearance of impropriety.”

At issue in the French court case is whether Ms. Lagarde abused her authority as finance minister in one of France’s longest-running legal dramas.

In 2007, she ordered that a dispute between Bernard Tapie, a flamboyant French businessman and friend of President Nicolas Sarkozy, and Crédit Lyonnais, a state-owned bank, be referred to an arbitration panel. The panel ultimately awarded Mr. Tapie a settlement of about $580 million, including interest.

Mr. Tapie, a former chief of the Adidas sports empire and a former Socialist minister who changed political loyalties to support Mr. Sarkozy’s 2007 presidential campaign, accused Crédit Lyonnais in 1993 of cheating him when it oversaw the sale of his stake in Adidas.

Mr. Sarkozy suggested that the Finance Ministry, which was overseeing the case because Crédit Lyonnais was a ward of the French state, move the case to arbitration.

Ms. Lagarde defended her role in the case again this week, telling French television that she had “exactly the same confidence and peace of mind” whether the court decided to pursue investigations or not.

If the court decides later to investigate, Ms. Lagarde will have to gird for a possibly lengthy legal process, although she would not necessarily be required to be present in France.

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European Bankers Meet to Refine Greek Debt Plan

July 6, 2011 by Leave a Comment

Even if rating agencies declared Greece to be in default, it might be possible to design a plan where the country would emerge from default within days or even hours, said a senior German official, who could not be identified because of the sensitivity of the matter.

Officials hope such a controlled default might ease Greece’s debt burden while minimizing the risk of unleashing unpredictable market forces. Some bankers have warned that a decision by Greece not to repay the full value of its bonds could touch off a panic that would rival the collapse of Lehman Brothers in 2008. The European Central Bank has said it would oppose any plan that was not completely voluntary.

The official’s comments came as French and German bankers and representatives of central banks met in Paris on Wednesday to discuss ways out of the crisis, which sharpened further late Tuesday after Moody’s Investors Service cut Portugal’s debt rating to junk status.

The European Commission’s president, José Manuel Barroso, said Wednesday that Moody’s decision to lower Portugal by two notches and maintain a negative outlook was fueling speculation in financial markets, Reuters reported. “Yesterday’s decisions by one rating agency do not provide more clarity,” he said in Brussels. “They rather add another speculative element to the situation.”

Finance Minister Wolfgang Schäuble of Germany said Wednesday that he could see no justification for Moody’s downgrade of Portugal’s debt and believed limits should be put on the rating agencies’ “oligopoly,” according to Reuters.

Moody’s action fed anxiety that Greece’s problems could be contagious, threatening other countries like Spain and perhaps even the integrity of the euro area.

Officials in countries like Germany, the Netherlands and Finland are trying to appease citizens angry about having to pay for a Greek bailout. It is unclear, though, whether the plans put forward so far would do much to ease the financial burden on Greece.

According to the most optimistic assessments, banks would contribute about €30 billion, or $43 billion, in debt relief to Greece by agreeing to swap maturing bonds for new ones with longer maturities. That sum would be less than 10 percent of Greece’s outstanding debt.

The €30 billion figure is probably a reach. German commercial banks have only about €2 billion in Greek bonds that would be part of a rollover plan.

Critics in Greece and elsewhere have complained that the long debate about involving bond investors has only exaggerated the country’s plight by creating uncertainty and undermining efforts to find buyers for government assets that are for sale.

Plans to rope banks into a Greece relief package suffered a setback Monday after Standard Poor’s said that a proposal by French banks to help Greece to meet its medium-term financing needs would constitute a de facto default because banks would be required to roll over loans for a longer term at a lower interest rate.

French and German bankers were scheduled to meet Wednesday morning at the headquarters of BNP Paribas in Paris with central bank officials, under the auspices of the Institute of International Finance, an association of the world’s biggest financial companies, to discuss how to proceed, said people briefed on the plan who were not authorized to speak about it publicly.

“We’re continuing to work for a possible solution,” Michel Pébereau, chairman of BNP Paribas, the biggest French bank, said Tuesday at the Paris Europlace conference, a gathering attended by hundreds of international bankers. If the current ideas do not work, Mr. Pébereau said, “we’ll come up with something else.”

The issue will also be discussed by European finance ministers when they hold a regularly scheduled meeting next week, but a decision then is unlikely, the German official said.

Mr. Schäuble, the German finance minister, has been a leading proponent of involving holders of Greek bonds, by encouraging them to swap existing bonds for new ones that would be paid back over a longer time period.

In a letter June 6 to other euro-area finance ministers as well as top officials at the International Monetary Fund and European Central Bank, Mr. Schäuble said that the private sector contribution should be “quantified and substantial.”

“There is a realistic chance to minimize the negative impact on financial markets while at the same time reaching the necessary burden sharing between taxpayers and investors,” Mr. Schäuble said in the letter.

The German government official said Monday that Mr. Schäuble’s statement was still considered a basis for discussion.

Moody’s cut its rating on Portugal’s long-term government bonds Tuesday to Ba2 from Baa1 and said the outlook was negative, suggesting more downgrades might be in store.

Liz Alderman reported from Paris. David Jolly contributed reporting from Paris.

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Demand for Nike Brand Helps It in Fourth Quarter

June 28, 2011 by Leave a Comment

Futures orders gained 12 percent, excluding currency fluctuations.

Nike’s net income in the fiscal fourth quarter, which ended May 31, rose 14 percent to $594 million, or $1.24 a share. Net income for the year ago period was $522 million, or $1.06 a share.

Nike was expected to earn $1.16 a share, according to the average estimate of analysts surveyed by Thomson Reuters.

Revenue for the quarter rose 14 percent, to $5.8 billion from $5.08 billion. Excluding currency movements, revenue climbed 11 percent.

Nike was expected to generate $5.528 billion in revenue in the period, according to a Thomson Reuters analyst poll.

Apparel retailers are struggling with higher material, labor and freight costs. But Nike was able to fend off such pressure because demand for its brand was so strong during the quarter, according to Matt Arnold, an analyst at Edward Jones.

“The best way to offset higher costs is to generate strong demand growth, and Nike was able to do that,” Mr. Arnold said.

Futures orders, excluding currency exchange rates — a closely watched measure of sales growth — came in ahead of Wall Street estimates. Orders for June through November increased 15 percent to $10.3 billion. Excluding currency effects, orders rose 12 percent, Nike said.

Robert Drbul, an analyst at Barclays Capital, expected futures orders to be up 8 to 10 percent.

Mr. Arnold, the analyst at Edward Jones, was expecting future orders to be up at least 8 percent. Strong futures orders suggest Nike will be able to raise prices later this year, he added.

Shares of Nike rose 4.5 percent, to $85.25 in after-hours trading.

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Retail Sales Rose in May but Fell Short of Forecasts

June 2, 2011 by Leave a Comment

Sales at discount stores that have been open at least a year grew by 7.8 percent in May, the best showing by any group of retailers in terms of sales last month, according to a survey of 24 retailers released on Thursday.

But the overall measure of what are known as same-store sales, compiled by Thomson Reuters, rose 4.9 percent on average 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, depressed housing sector, and the recent rise in gasoline prices. But retailers have tried to adapt to attract buyers who are still conservative about how much they open their wallets, and where.

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

“In totality we are still seeing significant headwinds from a consumer confidence perspective,” said Mr. Mityas. “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, whose ability to spend is seen as a reflection of any progress in the economic recovery.

The survey fell a day ahead of 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 in the United States. With 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, higher end 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 also did well, climbing 4.5 percent overall, slightly above expectations of 4.2 percent.

Another survey of chain store sales from the International Council of Shopping Centers released on Thursday also suggested, as the Reuters survey did, that consumers on the high and low ends of the income scale were doing the most shopping. Neither survey includes Wal-Mart.

“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,” said Chris G. Christopher Jr., the senior principal economist for IHS Global Insight.

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

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.

In the Thomson Reuters analysis, same-store sales at Saks showed the best increases of individual retailers, with a 20.2 percent jump in May, followed by Costco’s 13 percent rise.

Saks said in a statement that a four-day sales event helped push up May’s calculations. Macy’s reported same-store sales were up 7.4 percent. The department store said in a statement that it was raising its guidance, with same-store sales rising by about 5 percent in 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’swere pursuing consumers with better pricing and merchandising.

“They are clearly setting the bar,” he said.

Nordstrom was up 7.4 percent.Among the companies that missed forecasts by the biggest margin were Destination Maternity, which showed same-store sales declining by 8.6 percent, the worst drop of the 24 retailers, worse than the decline of 1 percent forecast by analysts. J.C. Penney, which had been expected to show a 3.3 percent rise, fell by 1 percent. Gap Inc and Stage Store also fell short of forecasts.

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

Article source: http://feeds.nytimes.com/click.phdo?i=a1454c30e69304fa48d06dfe794b6ba1

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Media Decoder: One View of the News World

May 23, 2011 by Leave a Comment

When Xinhua, the official government news agency of China, wanted to upgrade from its old office in Queens, it sought out a space that matched its ambitions. So it leased the top floor of a skyscraper in Midtown Manhattan, one with commanding views of the headquarters for Thomson Reuters, the News Corporation, The New York Times and other leading news organizations that have offices nearby.

Last week in its own official account of the “opening ceremony” — this was no mere relocation, it was an arrival — the news agency said that its location gave it “a spectacular spot in this center stage of world-class media.”

Xinhua proudly paraded curious reporters, most of them Chinese, through its new North American headquarters at 1540 Broadway, regaling them with facts that illustrated its reach.

The agency has been reporting from New York for 40 years, and now employs 41 people in the city. In North America, it has bureaus in Chicago, Houston, San Francisco, Los Angeles and Vancouver, to name a few. A slide show playing on a large screen mounted on the wall of the airy office reception area ticked off milestones. 1971: United Nations bureau opens. 1985: Cairo and Mexico City. 2004: Brussels.

“It’s just like Thomson Reuters or Bloomberg,” said the tour guide, Ariel Lei Yang, Xinhua’s director for television operation.

Except that Thomson Reuters and Bloomberg do not answer to the Communist Party.

Xinhua is trying to convince the world that it is more than a propaganda arm of the Chinese government, but it is finding that message a tough sell. Taking questions, Xinhua’s vice president Zhou Xisheng was asked twice whether the news agency could ever be objective as an arm of the government.

“I believe there is some misunderstanding,” Mr. Zhou said, delivering such a lengthy answer that his English-speaking interpreter was unable to keep up. “Of course we will need to report what’s happening and give it our own explanation. I don’t think that’s propaganda.”

He added: “If you find in our reporting mistakes such as saying white is black, then you have the right to criticize us. I think our reporting is really reliable.”

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Reuters Breakingviews: A Rule Gives as It Takes Away

May 16, 2011 by Leave a Comment

That is hardly what Paul Volcker envisioned when the White House trotted him out amid a frenzy of anti-Wall Street sentiment in January 2010. Mr. Volcker, a former Federal Reserve chairman, said the rule would make banks safer by curtailing high-risk behavior, including investing in leveraged buyouts.

The Dodd-Frank law stipulates that a bank’s own money cannot comprise more than 3 percent of a private equity fund it manages, and that aggregated fund holdings cannot total more than 3 percent of its Tier 1 capital. For most banks, that is no big deal. Many got out of the buyout business altogether to avoid conflicts with clients like TPG Capital and Kohlberg Kravis Roberts.

Not Goldman. It raised a $20 billion fund, its sixth, at the height of the precrisis boom. Moreover, the firm and its partners accounted for around a third of the fund’s money. Part of the allure for state pension funds, sovereign wealth funds and others is investing alongside Goldman and its people.

That model is threatened by the Volcker Rule. But while the rule limits how much of their own money banks can sink into a fund, it does not on its face place the same restriction on investments made directly from their balance sheets.

In theory, that means Goldman or another bank could make a direct investment and bring other investors along for the ride through a single purpose mini-fund managed by the bank — a bit like the merchant banks of yore.

In a traditional buyout fund, losing bets offset winning ones in calculating the manager’s performance fees. Not so if the deals are done one by one: the manager would collect on the winners, but there would be no offset for the losers. That potentially works to the fund manager’s advantage.

True, the rules potentially limit this kind of investment in other ways, for example, through higher capital charges. And investors might push back, too, by demanding lower fees or higher performance hurdles. But however it turns out, it is something Mr. Volcker surely did not intend.

Greek Bailout Blues

Euro zone governments and the European Central Bank keep insisting that a restructuring of Greece’s sovereign debt is neither desirable nor necessary. But their confidence in the country’s creditworthiness seems to be shaky at best. As they consider an add-on to the bailout package they agreed upon barely a year ago, they are now contemplating asking Greece to pledge collateral against future borrowing.

Greece’s 2010 bailout covered its financing needs only for two years, assuming it could raise 27 billion euros from investors in 2012. This now looks near impossible, making a second bailout unavoidable. But that looks hard too. Taxpayers are rebelling in lender countries like Germany and Finland, and euro zone politicians would struggle to justify lending more money to Greece when it is already barely complying with current bailout conditions in the first place.

Collateralizing the loans would make a second bailout easier. That could mean pledging assets like real estate, or specific revenue streams like tax receipts. Vague assets, like expected privatization receipts, will not be enough.

But there are drawbacks. The first is that it could run into fierce opposition in Greece, if seen as a humiliation. There is also a question about whether collateralization would cause a payout on Greece’s $5.4 billion of credit-default swaps, as holders could argue that Greece’s other debt had been subordinated. It probably would not instigate the swaps, but some short-sellers might disagree.

Finally, collateralized lending would send the implicit message to bond markets that euro zone lenders do not think much about Greece’s creditworthiness. That will make it harder to keep up the pretense that restructuring is not necessary, and that European banks do not need to recapitalize to brace for a sovereign default.

Lending with collateral is better than having more of the same, but it falls short of achieving what a proper restructuring would do.

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Germany and France Bolster the European Economy

May 14, 2011 by Leave a Comment

As a result, the European Commission said in its spring forecast that prospects for 2011 looked “slightly better” than six months ago.

But it also raised some caveats, noting that the pace of recovery would be uneven across the 17-nation bloc for some time to come, that inflation remained a worry and “moreover, despite some improvement in labor markets, the prospect is for a rather jobless recovery.”

The powerhouse in Europe in recent months has been Germany, but the latest data showed that France was catching up. The two countries together account for nearly half the euro zone’s economic output.

The German Federal Statistics Office reported that gross domestic product grew 1.5 percent over the previous quarter, when harsh weather held growth to just 0.4 percent.

The figure was well above analysts’ estimates and showed that Germany’s economy had recovered fully from its worst recession since World War II. “The precrisis level of early 2008 has been exceeded,” the office said.

France, too, surpassed expectations with growth of 1 percent, the steepest increase since spring 2006, according to the statistics office Insee. That compared with an increase of just 0.3 percent in the last quarter of 2010, and a median forecast of economists surveyed by Reuters and Bloomberg News of 0.6 percent.

Over all, G.D.P. grew 0.8 percent in the euro area compared with the pace in the previous quarter, according to the European Union statistics office, Eurostat, somewhat better than economists had expected.

But the strains of austerity measures to rein in gaping deficits were evident as well.

Spain’s economy grew only 0.3 percent from the previous quarter, according to the National Statistics Institute in Madrid. Although that was slightly better than expected, it was largely attributed to exports amid weak domestic demand and high unemployment.

Portugal posted its second quarter of contraction, with its G.D.P. dropping 0.7 percent, according to Eurostat. The country is bracing for continued economic struggles as it awaits a 78 billion euro ($112 billion) bailout by the European Union and the International Monetary Fund. With the Finnish Parliament approving the bailout on Friday, European finance ministers are expected to sign off on the package early next week.

That approval had been threatened by the True Finn Party, which opposes bailouts.

Another struggling country, Greece, registered its first quarter of growth since 2008. Output grew 0.8 percent in the first quarter, according to Eurostat, compared with a decline of 2.8 percent in the final quarter of last year.

European stock markets and the euro both slipped lower. While economists called the reports encouraging, especially for Germany and France, they warned that keeping up the momentum would be difficult.

“Looking forward, we expect growth to slow down to more moderate rates, as world trade growth loses some momentum and fiscal policy tightening and higher oil prices kick in,” Aline Schuiling, senior economist at ABN Amro Bank in Amsterdam, wrote in a note. “Nevertheless, the German economy should continue to outperform the euro zone average by a wide margin.”

Oscar Bernal, an economist at ING Bank in Brussels, said that the pickup in industrial activity in France in particular “might just be a catch-up” after the year-end lull.

“All in all, we believe that the first-quarter G.D.P. growth acceleration will only be temporary,” he said, adding that the French government will still face difficulties meeting its budget-deficit reduction targets.

Strong demand for exports like automobiles has fueled the recovery in Germany, as in past recoveries. Domestic demand has typically trailed, leading to criticism from Germany’s trading partners. However, German consumers seem to be gaining confidence this time as unemployment falls sharply.

The German statistics office noted that compared with the last quarter of 2010, domestic consumption was up “markedly,” along with investment by businesses in machinery and equipment and construction.

“The growth of exports and imports continued, too,” it said. “However, the balance of exports and imports had a smaller share in the strong G.D.P. growth than domestic uses.”

The French statistics office noted that manufacturing production soared 3.7 percent in the first quarter, the strongest growth for at least 30 years. Household consumption was also up, but only slightly. Imports grew more rapidly than exports, weighing on the overall growth figure.

Article source: http://www.nytimes.com/2011/05/14/business/global/14euecon.html?partner=rss&emc=rss

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Rise in April’s Retail Sales Comes With a Warning

May 5, 2011 by Leave a Comment

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

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