February a bitter month for retailers
February's wintry blast chilled store sales for teen merchants, furniture sellers; Wal-Mart says late Easter a problem for March.
NEW YORK (CNNMoney.com) - A trifecta of freezing temperatures, record snow storms and escalating heating bills put a big chill into retail sales in February as many consumers chose to stay home instead of venturing out to the mall for late-season clearance sales. Teen clothiers and specialty retailers got hit especially hard. But some big discounters, including Wal-Mart and Target, as well as department store chain J.C. Penney, managed to avoided a sales stumble. The weakness in February came of the heels of a strong January, when record warm weather put consumers in the mood for spring merchandise. But retail experts had warned that changing weather patterns would lead to a sharp slowdown in sales last month. Analysts had been estimating that sales at stores open at least a year, an industry measure known as "same-store" sales, would rise 2.9 percent last month, according to a survey by Thomson Financial, well below January's gain of nearly 5 percent. "January was a one of the warmest months in over a 100 years. So that not only drove sales of spring clothing and other seasonal merchandise earlier than usual but it also probably stole some sales from February," said Ken Perkins, president of Retail Metrics, a Boston-based retail consulting firm. Aeropostale (Research)'s same-store sales fell 5.4 percent. Goth-inspired apparel merchant Hot Topic (Research) logged a dismal 8.4 percent drop in its monthly comparable sales, while sales at Pacific Sunwear (Research) fell 3.1 percent. Abercrombie & Fitch (Research) reported a more modest 5 percent sales increase in February, falling well-short of analysts' expectations for a 13.6 percent increase. Sales also tumbled 11 percent at No. 1 apparel seller Gap Inc. (Research) Elsewhere, home furnishing seller Pier 1 Imports (Research) posted a sales drop of 10.8 percent, widely missing analysts' forecasts for a much smaller decline. The company blamed weather woes for the disappointing performance as well as lean inventories as it cleared out goods for March. In the luxury category, Saks (Research) said its sales fell 6.4 percent versus Wall Street expectations for a 1.5 percent increase. Wal-Mart fares better but frowns on Easter shift
Nevertheless, there were a few bright sparks. "Not all the news was bad, however, as the department store group which faced a very easy comparison, exceeded expectations," Perkins said. "Positive surprises from J.C. Penney, Kohl's, Nordstrom, and Federated offset a big miss by Saks. Discounters also generated February comparable sales that surpassed projections,' he added. Wal-Mart Stores posted February sales that were broadly in line with its previously stated guidance. The world's largest retailer said sales at stores open at least a year, a closely watched retail measure known as same-store sales, rose 3.2 percent in the four-week period ended Feb. 24. The retailer had forecast sales last month to rise in the range of 2 to 4 percent. Total sales rose 11.9 percent over last year to $25 billion. Separately, Wal-Mart announced it was increasing its annual dividend 11.7 percent to 67 cents a share. Wal-Mart (Research) expects March same-store sales growth of between 1 to 3 percent. In a statement, Wal-Mart said a calendar shift resulting in Easter moving three weeks later this year would translate to weaker March sales and a stronger April. Wal-Mart rival Target (Research) posted a 3.5 percent increase in sales, after it had cut its forecast to 2.5 to 3.5 percent growth from its original 4.5 percent. Warehouse club operator Costco (Research) was another winner, logging an 8 percent increase in sales last month. ----------------------- Is "Made in U.S.A." back in vogue? Click here to read more. Wal-Mart, Kroger, Safeway better watch out. The British are coming!Click here to read more. |
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