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Chains post strong sales
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May 7, 1998: 2:49 p.m. ET
Warm climes, extra holiday weekend boost April retail store balance sheet
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NEW YORK (CNNfn) - Wrapped in the warm embrace of El Nino and capitalizing on the extra holiday weekend, chain stores last month churned out better-than-expected sales, as consumers replenished their wardrobes and stocked up on big-ticket items.
Discount, specialty and department stores alike on Thursday reported upbeat April sales for stores that have been open at least one year, helped largely by a turnaround in the long-suffering apparel sector.
"Essentially, the shift of Easter from March into April certainly helped to strengthen sales," said Bear, Stearns retail analyst Dana Telsey. "In addition, we had some good weather during the month so, all in all, people were out spending both on apparel and hard goods."
Surging consumer confidence, increased disposable income and low unemployment rates didn't hurt matters either.
Kmart, (KM) the third largest big-box retailer, topped the charts with a 16.2 percent jump in April sales.
Wal-Mart Stores (WMT), the nation's largest retailer, came in a close second with a 13.2 percent gain. And Sears, Roebuck & Co. (S) recorded a 3.9 percent jump in domestic sales.
J.C. Penney sales were up 2.8 percent.
Among the biggest gainers were Talbots and Gap, specialty apparel retailers that each posted about a 29 percent jump in monthly sales.
Earlier this year, Talbots recorded lower-than-expected sales as a result of deep discounting of merchandise. The store had been unable to clear out holiday inventory.
"Talbots was the biggest surprise," Telsey said.
Department stores, which historically perform best in the fourth quarter, also reported solid April gains.
Saks Holding (SKS) sales rocketed up 17.7 percent, followed by Dillard's (DDS), which rose 14 percent. Federated Department Stores, parent company of Macy's and Bloomingdale's, posted a 5 percent sales gain.
May Department stores (MAY) trailed with a minimal increase of less than 1 percent.
As a category, however, specialty retailers performed the best.
The Gap (GPS) and Talbots (TLB) each posted about a 29 percent jump in monthly sales, while The Limited Inc. jumped 18 percent and Lowe's (LOW) grew 9.4 percent.
In previous months, Talbots has had disappointing results. The company attributes its stronger April sales to "better than anticipated sell-through of regular-price spring merchandise."
Telsey said the same holds true for most retailers. Buoyed by rosy economic data, consumers aren't necessarily shopping for bargains, she said. Many are paying full price.
William Blair & Co. analyst Skip Helm said a combination of factors helped to lift April sales.
"It's not just the Easter timing," he said. "The whole retail environment is pretty solid out there, especially driven by home furnishing."
Despite rumblings of an interest rate hike, Helm added, consumer spending patterns show no signs of tapering off.
"Consumer spending seems to have great momentum here and, with the way spending is going, it's hard to imagine something getting in the way," he said.
Telsey disagrees.
"In May you should look for more moderate same-store sales increases," she said, noting that May sales typically suffer from the Memorial Day weekend. "You will see some ups and downs in terms of same store sales over the next few months."
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Wal - Mart
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