U.S. retailers post sales growth for April in fifth monthly increase
Friday, May 7, 2010
Retail sales continued to climb in April despite concerns that a dramatic spike in spending during the previous month would dampen consumers' appetites.
About one-third of the 31 national chain stores that reported monthly results on Thursday showed an increase in sales at stores open at least a year, a measure known as same-store sales that gives a key reading of a retailer's health. Shoppers visited luxury department stores such as Neiman Marcus, where monthly sales jumped 11 percent compared with April 2009, and warehouse clubs such as Costco, which recorded a 3 percent rise in sales excluding fuel at its U.S. stores.
According to an analysis by market research firm Kantar Retail, overall retail sales increased 1.2 percent in April from a year ago -- significantly lower than the 9.2 percent jump in March but well above the 2.3 percent decline in April 2009.
"These results provide some signs of the pick-up in spending that shoppers are sustaining," said Frank Badillo, the firm's senior economist.
Consumers slowly have begun to open their wallets after freezing spending for much of the recession. The International Council of Shopping Centers, a trade group, reported that industry same-store sales rose 0.8 percent in April, marking the fifth straight monthly increase since December. Luxury stores, which had taken a beating during the financial crisis, have rebounded to become one of the biggest gainers.
Saks said its strongest sales in April were in women's clothing, shoes and handbags; same-store sales grew 3 percent. The company said those gains came even though its promotions and discounts were less aggressive than last year. ICSC showed sales in the overall luxury sector rising 7.4 percent.
"We continue to believe consumers are reengaging with retailers across the value chain and would continue to look for signs of consumers trading back up," wrote Robert S. Drbul, an analyst with Barclays Capital, in a note to clients.
Still, April's results were muted compared with the previous month's. Sales at teen clothing stores took a dive, with Abercrombie & Fitch, Aeropostale and Wet Seal all posting declines. Even some discounters posted lower sales, with Target dropping 6 percent and Kohl's falling nearly 8 percent.
Retail experts said an early Easter and warm weather in March shifted some sales into that month. In addition, they cautioned that last spring's results were so dismal that even mediocre performances this year look rosy. Taken together, same-store sales for March and April compared with a year ago were up 4.9 percent, according to the ICSC.
"We think it more likely [means] that April represents a pause in the action after wildly positive trends in March," Todd Slater, an analyst for Lazard Capital Markets, wrote in a note to clients.