For retailers, April is indeed cruelest
Wal-Mart, Target, other chains post dismal results, hurt by chilly weather in April, early Easter.
NEW YORK (CNNMoney.com) -- The nation's retailers had one of the worst sales months on record in April, hurt by chilly weather, rising gasoline prices and an early Easter holiday.
Wal-Mart (Charts, Fortune 500) said sales sank 3.5 percent at stores open at least a year, a key measure for retail chains known as same-store sales. That was well below analysts' forecasts for a 1.1-percent decline, according to Thomson Financial.
The world's largest retailer said April sales were the weakest since it began reporting same-store sales results in 1980.
And specialty store chain the Gap (Charts, Fortune 500) said same-store sales tumbled 16 percent in April due to the shift of the Easter holiday and clearance selling. Analysts expected a 7.1 percent decline.
Other retailers including Federated Department Stores (Charts, Fortune 500), owner of Macy's and Bloomingdale's, and J.C. Penney (Charts, Fortune 500) also posted a surprising decline in same-store sales.
Like other chains, Wal-Mart said chilly April weather across most of the country hurt sales of seasonal goods, and rising gas prices hurt sales of clothing, home goods and other merchandise. In addition, an earlier Easter season this year drove some sales into the March five-week reporting period.
"April is a severe calendar distortion," said Richard Hastings senior retail analyst at Bernard Sands.
According to Thomson Financial, which tracks numbers from 52 store chains, April same-store sales fell 1.8 percent after a strong 6 percent jump in March. In April 2006, same-store sales rose 6.5 percent.
The drop was the biggest decline since 2000, when Thomson Financial first started collecting the numbers. Excluding Wal-Mart, however, same-store sales rose 0.4 percent.
But the weak April sales may not necessarily be a sign that consumer spending is weakening, analysts said, citing the Easter calendar issue. May sales could give a better indication of the state of the consumer.
"There has been a deceleration in same-store sales since early 2006 and that is continuing," Hastings said, but an accurate depiction of consumer spending won't be apparent until closer to the end of the back-to-school spending season, he added.
Retail sales are closely watched by economists since consumer spending overall fuels more than two-thirds of the nation's economy.
Tom Schoewe, Wal-Mart's executive vice president and chief financial officer, said in a statement that the company expects May same-store sales to be up 1 to 2 percent and store sales for the second quarter to rise 1 to 2 percent as well.