US retailers posted a 62% comparable-stores sales gain in April, the biggest increase since June 2011, as better weather and the late Easter as well as aggressive promotions attracted shoppers.
The jump in sales at stores open at least a year handily beat the 3.9% gain that was the average of analysts’ estimates, researcher Retail Metrics Inc. said today. Combined March and April sales rose 4.7% from a year earlier.
The firm said retailers may not entirely be in the clear yet. Positive sales results would need to follow in May to confirm the trend, and discounts of as much as 50% may hurt retailers’ first-quarter earnings.
“We need to carry through with solid Mother’s Day and Memorial Day weekend sales leading to a solid May result before we would feel more comfortable the consumer is back,” Ken Perkins, president of the Swampscott, Massachusetts-based firm, said in a statement today.
Cato Corp., a women’s apparel retailer based in Charlotte, North Carolina, posted the biggest increase with 18%. The company raised its profit forecast for the first quarter to as much as $1.05 share, up from a previous projection of a maximum of 95 cents. Shares of Cato rose 3.8% to $28.75 at the close in New York.
Victoria’s Secret
L Brands Inc., owner of Victoria’s Secret, reported an 8% sales increase, while teen apparel chain Zumiez Inc. posted an 8.2% gain. Costco Wholesale Corp. (COST) saw sales advance 5%.
L Brands shares rose 4.8% to $55.93 today, while Zumiez added 11% to $27.54.
Gap Inc. (GPS) posted a 9% sales jump after the market closed today.
The aggregate number is based on about a dozen chains that still report monthly sales figures.
The bulk of the more than 100 publicly held retailers tracked by analysts report only quarterly comparable-store sales. Those will rise 1% in the first quarter, analysts’ estimated before today.
Retailers remained aggressive, with numerous apparel chains offering 30 percent to 40% off the entire store and a handful discounting by 50%, Perkins wrote in a May 1 report. Chains are sitting on inventories unsold after the cold winter and prolonged weak store traffic.
Analysts have reduced their estimates to reflect that overhang. When the year started, analysts estimated retailers’ first-quarter earnings would grow more than 13%, Retail Metrics said. That average had dropped to 7.5% on March 1 and, before today’s sales reports, stood at 2.1%, the researcher said this week in an e-mail.
Bloomberg
