March was a month that both giveth and taketh away this year as the upside benefits expected by many due to the earliest Easter in 16 years were offset by the wicked winter weather in much of the northern tier of the country. While the early holiday, which was three weeks earlier this year, brought more people out to shop in March, the cooler temps inherent in much of the country during the March timeframe kept consumers from jumping into Spring apparel purchases earlier this year.

The shift in the holiday again for this year (it hurt March results last year), is again one more reason for more retailers holding back and reporting quarterly numbers. Shoe Carnival management was quite pointed in their statements that the market should not get too excited about a sharp rise in March sales because April will certainly see the other side of the coin. SEW agrees that it is generally smarter to look at the two month together (or the full Q1) to get a legitimate feel for a retailer’s performance.

Based on the monthly survey of 71 chain retailers conducted by the International Council of Shopping Centers, same-store sales rose 4.1% for March, dampened by a “chilly Easter holiday”. Still, the performance at retail outpaced ICSC’s 3.5% estimate for the month, an estimate that Michael Niemira, ICSC's chief economist and director of research, said was justified due to last year’s strong 7.0% performance.

“Spending associated with the Easter holiday boosted sales, but the cold weather meant that it was not as much as it could have been,” said Niemira.

Niemira estimated that the early Easter had a 100 to 200 basis point impact on the month. His report suggested that the “Easter-adjusted year-over-year sales pace” was closer to 2.5% for the period.

Excluding Drug Stores, the Discount Store sector was the top performer for the month, rising 5.0% for March versus last year. Target was a key driver here with an 8.2% gain for the month, followed by Wal-Mart’s resurgent stores segment that posted a 4.8% same-store sales increase for the period.

Wholesale Clubs were a close second with a 4.7% gain for the month, a number that was hurt by WMT’s Sam’s Club performance (+2.1%), but was helped by Costco’s 7.0% increase for the month on top of an 11% jump in March last year.

Footwear Stores, which should have benefited greatly from the early Easter, were a mixed bag for the month. Famous Footwear has gone to quarterly reporting so it left just Shoe Carnival, with a strong 13.0% gain for the month, and Payless, which posted an anemic 1.4% comp sales improvement, to combine for a 3.4% gain for the sector.

While they are not part of the ICSC survey results, the big surprise here was DSW, which broke with the trends of the past year in posting a 1.6% same-store sales decline for March versus a 12.5% jump in the year-ago period. DSW Shoe Warehouse sales were up 15.2% to $110.9 million from $96.3 million in March last year.

Shoe Carnival clearly was the big winner in the sector for the month, reporting their second straight month of double-digit comp store sales gains. Sales for the month ended April 2 increased 18.4% to $67.1 million from sales of $56.6 million for the year-ago period. SCVL saw more energy coming out of its southern stores in the month, with comps running in the high-teens there, as northern store comps grew in high-single-digits.

In a departure from the past year, the athletics business did not drive the growth for the month. Men’s and women’s athletics were up in high-singles, while the men’s and women’s businesses outside of athletics increased in the high-teens. Children’s, which includes all categories, was up in double-digits. Total footwear comps were up 13.4% and accessories were up low-singles.

CFO Kerry Jackson said in a taped call that the retailer can finish the quarter with comps up in the mid-single-digits even if April comes in with a mid- to –high-single-digit decline. Inventories at quarter-end are expected to be flat to last year on a per-store basis.

Shoe Pavilion, which is also not in the ICSC numbers, reported its fiscal first quarter numbers, posting a 10.7% comp store sales gain for the period. Total net sales increased 19.0% to $23.3 million for the quarter ended April 2, compared to net sales of $19.6 million for the same period last year. SHOE opened one store and closed three stores during the quarter, with two closures due to lease expiration, for a total of 84 stores at quarter-end. The retailer plans to open between eight to ten stores in the remainder of 2005.

The Apparel Specialty sector of the ICSC survey got a huge boost from mall teen retailers in March. American Eagle Outfitters posted another monster month with a 29.2% comp sales increase and Abercrombie and Fitch followed suit with a 21.0% gain for the period. This growth has got to be coming from somewhere, and SEW had to look no further than GAP (-4.0%) and The Limited (-7.0%) for the pain. While they are not in the ICSC survey, some also pointed to moderating growth at Pacific Sunwear as a potential result of the sharp gains elsewhere.

Pacific Sunwear of California, Inc. reported that total sales for the month ended April 2 were $120.1 million, an increase of 15.7% over total sales of $103.8 million during the same period last year. Total company same-store sales increased 4.8% during the same period. Total transactions were flat on a comp basis, but the average sales per comp was up in mid-singles due to mid-single-digit gains in average unit selling price at retail.

But April Comps Expected to Suffer from Holiday Shift…
PacSun, the company’s action sports format, posted a 4.9% same-store sales increase for the period on top of a 13.5% gain in March last year. Management said that comps in the guy’s business were up in mid-singles, driven by denim, T’s, woven shirts, and sneakers. The gains were offset in part by weakness in shorts and boardshorts. Girl’s comps were also up in mid-single-digits, with strength coming from denim, swimwear, and sneakers. T’s, polo’s, shorts and sandals saw weakness.

d.e.m.o., the company’s suburban hip-hop format, saw same-store sales increase 4.3% on top of a 3.5% gain last year. The girls’ apparel business was up more than 20% here in March, again partially offset by a high-single-digit decline on the men’s side.

The Buckle fared better in March, as comp store sales increased 8.0% on top of a 14.2% gain in the year-ago month. Total sales were up 13.3% to $43.2 million from sales of $38.1 million in March last year.

In Department Stores, the Luxe category saw performance moderate a bit, posting a 4.4% gain for the month versus the high-single- to double-digit increases seen over the last year. The Luxe contribution, helped by a 5.5% increase at Nordstrom, wasn’t enough to keep Department Stores in positive territory, as sharp declines at May Company (-10.8%) and Dillard’s (-8.0%) helped push the total sector down 1.0%.

For April, ICSC predicts that same-store sales will increase 2.0% to 3.0% versus April last year.