US retailers enjoy spring sales rebound

US retailers enjoy spring sales rebound
By Jonathan Birchall in New York
Copyright The Financial Times Limited 2010
Published: April 8 2010 15:55 | Last updated: April 8 2010 15:55
http://www.ft.com/cms/s/0/8142606c-4319-11df-9046-00144feab49a.html


Monthly sales at leading US retail chains continued to bounce back from last year’s slump, as Easter spending and warm spring weather supported shoppers’ renewed readiness to make discretionary purchases in March.

Retail Metrics, which tracks the monthly figures, said its monthly same store sales index rose 8.7 per cent for the month, the largest monthly increase seen since it began tracking the data in 2000.

Ken Perkins, head of Retail Metrics, said that while the strong growth was dreiven by more than the early Easter, and the easy comparisions to last year, when the index fell 4.8 per cent.

“Consumers are generally feeling better about their plight and are finally making discretionary purchases and beginning to trade back up a bit,” he said.

Saks and Neiman Marcus, the luxury department stores, both reported strong increases in comparable sales from last year’s lows, of 12.7 per cent and 9.6 per cent respectively.

Gap, the largest US speciality clothing retailer, continued its recovery, with an 11 per cent increase in comparable sales, while Macy’s, the largest traditional department store, saw a 10.8 per cent lift.

Macy’s said its results were boosted by the timing of Easter and that it expected flat comparable sales in April, delivering a combined increase for the two months of 5 per cent.

Kohl’s, the mid-range department store, reported a 22.5 per cent increase in same-store sales. According to Kevin Mansell, chief executive, “all lines of business and all regions“ saw strong positive double-digit increases, supported by increasing customer traffic. Kohl’s raised its first-quarter guidance from $0.48-$0.52 to $0.55-$0.57 per diluted share.

JC Penney reported a 5.4 per cent increase in same store sales and raised both its sales and earnings guidance for the quarter. It said it now expects first-quarter sales to increase 2 per cent, against a previous forecast of flat to slightly positive growth, and raised its earnings guidance 4 cents to $0.20-$0.40 cents per share.

Target, the mass discounter, also reported a strong recovery in sales, which were up 10.3 per cent on a comparable basis. Gregg Steinhafel, chief executive, said the performance “exceeded our expectations, driven by particular strength in our apparel business”.

For March and April together, the retailer said it now expected comparable sales to increase by 3 to 5 per cent, and that both its stores and its credit card business “are on track to well exceed their respective profit plans for the first quarter”. Target said it expected first-quarter earnings to be at least 10 per cent above the current consensus Wall Street forecast of 74 cents.

Target’s larger rival Walmart does not report monthly sales numbers.