A later Easter holiday and the warmest April on record combined to provide the perfect scenario for strong sales growth in the month of April. Based on its survey of 59 retail chains, the International Council of Shopping Centers estimates that comp store sales grew 6.6% for the month versus April last year, the strongest comp sales gain since March of 2004 when comps rose 7.0%. ICSC had been expecting a 5.0% increase for the month. The Easter shift was estimated to account for roughly a point and a half of the gain for the period.
With Easter shifting back into April this year, retailers were clearly able to take advantage of the break that Mother Nature provided as well. Last year, the month of April was treading water as the loss of Easter into March held comps to a 2.2% gain for the period. Weather was an issue last spring as well, as cool, wet conditions through much of the season delayed sales of spring/summer product until much later. Comp store sales growth for the combined March/April period, which is a much better indicator of retail health because it removes the Easter effect, was up 4.3% versus last year and was about 500 basis points better than the growth then. The number for April was a surprise for many as gas prices continue to rise and mortgage rates creep back up. But solid employment numbers, higher incomes, and a strong stock market are all apparently helping keep consumers in the buying mood.
Discount/Mass retailers were the biggest beneficiary for the month, increasing their comp store sales by 7.4%, according to the ICSC survey, with Target leading the way with a 10.4% same-store sales increase for April. Wal-Mart was up 7.5% on a comp store basis. Department stores also got into the act for the month, with only Federated posting a comp sales decline (-0.8%) for the month. Two of the three “Luxe” retailers were at the upper end of the scale for the month, with Nordstrom posting a 7.3% increase and Neiman Marcus generating a 9.5% comp sales gain, but the Saks Fifth Ave group only saw comps inch up 0.8% for the month. In the mid-tier, Kohls is back on its game, posting a 13.4% comp store sales gain for the month on top of an 8.0% increase last year, and Stage Stores saw comps jump 16.9% for the period versus a 2.5% decline last year.
The all-important teen sector appears to be flourishing despite the rise in gas prices that should be putting a hurt on any teens wallet. But higher average wages may be trickling down here as well as a tight labor market drives up hourly wages for part-time help. American Eagle, Abercrombie & Fitch, Wet Seal, and Zumiez all posted consecutive double-digit comp sales gains for April and Pacific Sunwear made it back into double-digits as well.
Pacific Sunwear of California, Inc. posted sales of $94.3 million for the month, an increase of 23.3% over $76.4 million for last years month. Total company same store sales increased 14.0%, while PacSun same store sales increased 14.6% and d.e.m.o. same store sales increased 9.5%.
Total sales for first quarter were $300.0 million, an increase of 7.2% from $280.0 million last year. Comp sales for the whole company increased 1.8% during the quarter, while PacSun same store sales decreased 2.2% and d.e.m.o. same store sales increased 1.0%.
As a result of the strong April, the company remained comfortable with its first quarter earnings estimates of 16 cents per diluted share, which is at the high end of its previously issued guidance range of 14 cents to 16 cents per diluted share.
The Buckle, Inc. posted a 6.4% increase in net sales for the month to $31.6 million from net sales of $29.7 million in the corresponding month last year. Comparable-store net sales were also up, increasing 1.0% on top of a 4.0% increase last year. For the quarter, sales increased 3.8% to $109.6 million from $105.5 million for the same period a year ago. Comparable-store net sales declined 1.3% after increasing 11.3% last year.
Zumiez Inc. saw total net sales for the month of April increase 42.8% to $15.0 million, compared to $10.5 million last year. Same-store sales jumped 19.3% for the month, on top of an 11.1% increase in the year-ago period.
Foot Locker Sees U.S. Upside Almost Erased by Europe Weakness
Foot Locker, Inc. is making its way in the U.S. on the back of increased allocations of Nike marquee product, particularly at Champs and Footaction, but continued challenges in Europe nearly offset the upside in the U.S. and elsewhere, resulting in a rather anemic start to the retail year. Sales for the first quarter through April declined 0.9% to $1.36 billion from $1.38 billion in the year-ago period, but were only up 0.2% for the period when excluding the effect of the stronger U.S. Dollar. Total company comp store sales were up 0.5% for the quarter.
Comp store sales in Europe were reportedly down in the high-single-digits for the first quarter, while the U.S. business was up in the mid-singles, led by a high-single-digit comp store sales gain in the Footaction unit. The U.S. Foot Locker group was apparently up in the low- to mid-single-digit range, while Champs and Lady Foot Locker were both up in the mid-single-digit neighborhood. Company Chairman and CEO Matt Serra attributed part of the European decline to a “less promotional posture than the first quarter of last year.”
The quarter did improve as it progressed, with low- to mid-single-digit gains in February giving way to a low- to mid-single-digit decline in March before posting a mid-single-digit increase in April.
Mr. Serra went on to say that total sales fell short of expectations and issued revised guidance that called for first quarter EPS in the range of 36 cents to 37 cents per share versus previous estimates of 37 cents to 41 cents per share.
Shoe Carnival, Inc., which shifted to a quarterly reporting calendar for retail sales due in part to the impact of holiday shifts like the market experienced this quarter, said that sales started slow for the period, but “accelerated substantially” leading into Easter. Sales for the first quarter ended April 29 increased 4.8% to $168.5 million from sales of $160.7 million in the year-ago period. Comparable store sales increased 4.1% on top of a 5.5% gain in Q1 last year.
Athletic continues to be a bit sluggish at Shoe Carnival, posting comps of “just below flat” for the first quarter. Some of this is certainly the effect of sales shifting from classics, which are tracked in athletic at Carnival, to the fashion athletic, or low-profile, category, which SCVL tracks in casual. In athletic, technical running and skate shoes were said to be selling well, but this increase was offset by weakness in the classic product and the “shift in fashion to the low-profile look.”
The women's business was up high-single-digits for the period and men's was up in high-single-digits. Children's, which includes children's athletic, was up mid-single-digits. Total footwear comps were up 4.1% and accessories were up mid-single-digits. SCVL said that the women's dress and casual businesses continued to perform well and sandal sales were “much improved” over last year, posting an increase in the high-teens this year compared to comps for the year-ago quarter that were described as “substantially negative.” The shift in the mix of womens athletic to non-athletic sales as a percentage of the total helped boost gross margins for the quarter.
DSW Inc. saw comparable store sales increase 4.2% for the first quarter compared to the same period last year. Net sales for the quarter increased 12.3% to $316.5 million from $281.8 million for the same period last year.
Payless ShoeSource, Inc. posted a comparable store sales increase of 0.4% during the first quarter. Total sales for the first quarter were $694.8 million, a 0.1% decrease from $695.2 million in Q1 2005.
