Following a somewhat respectable March that saw several retailers raise guidance for the quarter, same-store sales for April saw the largest monthly gain since August on strength provided by several key factors. Tax rebates, warm weather, and the Easter holiday boosted same-store sales for April as the industry reported only its second comp gain since September.
Similar to March, discounters led the way as consumers continue to place a greater emphasis on value in light of a struggling economy. Expectedly, luxury stores continued their rapid descent into an oblivion that doesnt look to offer signs of relief anytime soon, while teen retailers emerged with some mild surprises, including notable comps gains from Aeropostale and Hot Topic.
The International Council of Shopping Centers estimated that the Easter holiday — which came three weeks earlier in 2008 — impacted April same-store sales by roughly 3 percentage points. Add to that a warmer-than-average April and tax rebates, and the ICSC says April was not as strong as it appears on the surface. The two-month March-April period performance remained sluggish with a run-rate of -1.4% (the average of the two monthly growth rates).
As noted, discounters continue to be a bright spot as the market struggles to rebound.
Wal-Mart Stores, which includes The Sams Club division, exceeded analysts expectations again, reporting April comps up 5.0% excluding fuel. Including fuel, the worlds largest retailer reported comp growth of 4.0%. Management said grocery, health and wellness, hardlines, entertainment and home had positive comps, and noted that seasonal products in Wal-Mart U.S. stores were up high-singles compared to the Easter period of last year. Management for Wal-Mart also noted that the retailer will now report sales on a quarterly basis rather than monthly.
Target Corp. saw comps inch up 0.3% as traffic increased in April. Management said they now expect earnings per share to be “well above” the current median First Call estimate of 52 cents per share.
The TJX Companies, which operates T.J. Maxx and Marshalls, among others, raised guidance after increased store traffic boosted comps by 3.0%.
On the other end of the spectrum, luxury stores continued to struggle, as the ICSC reported comps plummeted 19.6%, but were relatively flat on a month-over-month basis. “Leading the way” were Neiman-Marcus and Nordstrom, where same-store sales fell 22.5% and 32.0%, respectively. Macys, which began to report monthly results again in November, saw comps fall 9.1% for the month.
As noted, Aeropostale and Hot Topic bucked the trend for teen retailers, posting a 20.0% and 3.1% comp growth, respectively. Abercrombie & Fitch saw same-store sales plummet 22.0%, which marked the high-priced apparel retailers twelfth straight month of declining comps.
Retail Metrics, an independent retail research service, said 74% of retailers topped expectations, while many chains-including Kohls, J.C. Penney and Aeropostale-raised Q1 guidance. The Standard and Poors Retail Index fell 1.3%-near 7-month highs-and retail stocks inched up further following a report by the Labor Dept. suggesting the job loss rate is slowing.
Zumiez reported comparable store sales for April declined 13.8% versus an increase of 4.1% for the year-ago month. Total sales for April decreased 1.7% to approximately $23.8 million. Comps were down in the high-teens to low-twenties for each week of the four-week fiscal month.
On a pre-recorded conference call, management attributed the decline to negative comps in mens and juniors apparel, accessories, hard goods and boys apparel, which more than offset positive comps in footwear. “Our comping stores west of Texas, which comp down in the high negative teen percent range, continue to post comp-store losses lower than our stores in the South, Midwest, and Northeast,” CFO Trevor Lang said on the call.
Lang said ZUMZ now expected a first quarter diluted loss per share of 9 cents to 8 cents as compared to the previously-announced diluted loss per share of 17 cents to 13 cents.
The Buckle continued to show strength in Q1 as it generates impressive numbers in the mall. Comps for the retailer increased 18.2% as overall sales increased 25.6% to $59.1 million from $47.0 million in the year ago period.
