Outlook for Consumer Spending Turns Hazy

A shopper passes a window display at Saks Fifth Avenue Thursday, April 12, 2007 in New York. The outlook for consumer spending turned hazy Thursday as warnings of weak sales ahead overshadowed better-than-expected March sales. Cooler weather in recent days has stifled sales of spring clothing. And the slowing economy, particularly the weakening housing market, could challenge shoppers in the coming months. (AP Photo/Mark Lennihan) (Mark Lennihan - AP)

Wal-Mart posted a 4 percent gain in same-store sales, above the 1.6 percent estimate from Wall Street analysts surveyed by Thomson Financial.

Tom Schoewe, Wal-Mart's chief financial officer, noted that the company has estimated first-quarter earnings of 68 to 71 cents per share. But, he warned in a statement, "while the earnings guidance is still attainable, given the tough sales environment for the April period, it will be a challenge."

For April, Wal-Mart said it expects same-store sales to be anywhere from unchanged to a 2 percent decline.

Federated, which operates Macy's and Bloomingdale's, posted a modest same-store sales increase of 2.3 percent, below the 3.3 percent estimate from Wall Street.

"March sales fell just short of our expectations in most regions across the country, largely attributable to weakness in home-related merchandise categories," said Terry J. Lundgren, Federated's chairman, president and CEO, in a statement. "Unseasonably cold weather as new spring merchandise flowed into the stores in the pre-Easter period also contributed to disappointing sales in the month."

Federated expects sales in the first quarter to be at the low end of its forecast.

Bebe Stores Inc. posted a 0.1 percent increase in same-store sales, below the 2.6 percent Wall Street estimate. The women's clothing retailer also warned that earnings may fall short of its outlook for the first-quarter.

Among stronger performers, Penney had a 10.6 percent gain in same-store sales in its department store business, above the 7.5 percent Wall Street forecast.

Luxury retailer Saks Inc. had a robust 10.1 percent gain in same-store sales, though it was below the 13.0 estimate. Nordstrom Inc.'s same-store sales rose 15 percent, above the 8.2 perent estimate.

Limited Brands Inc.'s same-store sales rose 8 percent, above the 6.7 percent projection.

Gap Inc., which has struggled for months, had a successful March, reporting same-store sales rose 6 percent and easily beat Wall Street expectations for a 1.1 percent decline.

Pacific Sunwear had a 14.1 percent gain in same-store sales, well exceeding the 3.4 percent estimate.

On Wednesday, Target Corp. reported same-store sales rose 12 percent, beating the Wall Street estimate for a 11.5 percent gain.