Mar 5, 2009
US retailers February sales weak, but Wal-Mart shines
Mar 5, 2009
By Aarthi Sivaraman
NEW YORK (Reuters) - Top U.S. retailers saw anemic same-store sales in February as shoppers kept a tight hold on spending, but Wal-Mart Stores Inc again beat expectations and said lower gasoline prices had relaxed some household budgets.
Apparel retailers and department stores posted some of the steepest sales declines, according to results released on Thursday, but better weather and new merchandise helped chains like Gap Inc and American Eagle Outfitters top dismal forecasts.
Analysts were expecting retailers to post an overall decline of 1.2 percent in February, although wide variations in performance were expected from discounters to apparel chains, according to Thomson Reuters. Excluding Wal-Mart, the drop was expected to be 4.8 percent.
Wal-Mart, the world's largest retailer, posted a better-than-expected 5.1 percent increase in sales at stores open at least one year, sending its shares up 3 percent in premarket trading.
"We believe falling gas prices significantly boosted household disposable income in February and therefore allowed for both more trips and more spending toward discretionary categories," Wal-Mart Vice Chairman Eduardo Castro-Wright said.
U.S. consumers have suffered in the past year from job losses, tighter credit and a weak housing market -- factors that have forced them to conserve money by shopping at discount stores and sticking to basic purchases like food.
Shoppers' frugality has helped discounters such as Wal-Mart and warehouse clubs like Costco and BJ's Wholesale Club, whose results have outpaced other chains in the past year.
But even BJ's and Costco posted disappointing same-store sales on Wednesday compared with a year ago, when consumers flocked to their fuel stations to beat high gas prices.
For February, BJ's reported a 0.6 percent increase in same-store sales, while Costco posted a 3 percent decline, both below expectations, according to Thomson Reuters estimates.
SLIGHT SPRING BOOST
Apparel retailers have been among the worst hit in past months, but analysts said better weather and new spring merchandise in stores might have helped sales a bit.
While February is not seen as a key month, given its place between post-holiday and early spring shopping periods, it could show how willing shoppers are to spend without the motivation of gift-giving.
Gap, with its Old Navy and Banana Republic chains, posted a smaller-than-expected 12 percent decline in same-store sales.
American Eagle's same-store sales fell a less-than-expected 7 percent as store traffic improved from prior months.
Children's Place said same-store sales were flat, and the kids' clothing retailer now expects quarterly earnings at the high end of its outlook.
Limited, with brands such as Victoria's Secret, narrowly beat expectations, with a 7 percent same-store sales decline compared with a 7.1 percent drop expected by analysts.
Hot Topic Inc posted a 10.8 percent increase in same-store sales that topped expectations.
(Reporting by Aarthi Sivaraman; Editing by Lisa Von Ahn)
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