Retail sales stage comeback in April
09.05.2008 04:02
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- Source: JS Online
Retail sales improved in April, with same-stores sales up by 3.3%, but industry analysts say they're still cautious about the future. "We would not read this as any signal that the retailing environment is markedly improving," said Ken Perkins, head of Retail Metrics, in his report Thursday. Perkins noted that April results were up against the easiest comparison of the year. Industrywide same-store sales declined by 1.8% in April 2007. Kohl's Corp., based in Menomonee Falls, reported a 3.5% increase in same-store sales, ahead of the 1.3% gain analysts reporting to Retail Metrics were expecting. As a result, the company said Thursday that first-quarter earnings will be higher than Kohl's earlier guidance for 41 cents to 42 cents per share. "We were encouraged by the improvement in our sales performance in April as business in seasonal categories improved," Kohl's Chairman and Chief Executive Officer Larry Montgomery said in a statement. After the announcement, Kohl's shares closed down $1.10 at $47.62. While encouraged, Montgomery said Kohl's expects that consumers will continue to be cautious in their spending. Kohl's is planning its inventories conservatively to reflect the weakness in the economy. "Unlike last month, weather does not appear to have been much of a factor in April, which suggests that, at least for now, the American consumer continues to muddle through today's macroeconomic weakness," said Mark Miller, an analyst with William Blair, in a report issued Thursday. Miller raised his first-quarter earnings estimate for Kohl's by 3 cents, to 44 cents a share. The industrywide same-store sales gain in April of 3.3% was higher than the forecast for a 2.3% increase and the biggest monthly sales gain since November, according to Retail Metrics, a Swampscott, Mass., research firm. But those industry numbers include fewer retailers than in the past, so they don't give a complete picture, said Britt Beemer, head of America's Research Group. Macy's recently stopped reporting monthly sales. Other chains that don't issue monthly reports are Home Depot, Lowe's, Circuit City, Best Buy and Sears. Results in April benefited from the shift of Easter into March this year. That date change meant that retailers lost a day of sales in March when stores closed on Easter and gained a day in April when compared with 2007. The combined March-April industrywide gain of 1.6% represents the underlying economic trend, according to the International Council of Shopping Centers. Eric Beder, senior vice president at the Brean Murray, Carret & Co. investment firm in New York, called the April results a pleasant surprise in his report Thursday. But Beder said, "When looking at the combined March-April results, the overall environment remains very challenging." Beemer said consumers who responded to America's Research Group's latest survey on stimulus checks plan to use 70% of the money to pay down debt, with about 20% going for retail purchases. "I think we're in this retail quagmire for another 14 months or so," Beemer said. Bon-Ton Stores Inc., the corporate parent to Boston Store, Herberger's and Younkers in Wisconsin, reported a 0.9% decrease in same-store sales, which was below analysts' expectations. Bon-Ton said sales were slowest in the home areas of their stores. Wholesale clubs showed the biggest gains for the month, with a 9.2% gain, according to a tally from the International Council of Shopping Centers. Much of that gain came from fuel sales. Without fuel, the wholesale clubs reported a 6.1% increase in same-store sales. Furniture stores had the worst results, with a decrease of 2.7% in April, according to the International Council of Shopping Centers. Michael Niemira, chief economist for the trade group, expects an industrywide gain in same-store sales of about 2% in May.
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