UNITED STATES-WAL-MART.
March retail sales offered up a basket of cracked eggs —the big one being Wal-Mart Stores Inc. Across the board sales were hurt by the consumer-spending pullback and the calendar shift of the Easter holiday.
The world’s largest retailer posted a 1.4% increase in U.S. same-store sales for last month, excluding gasoline sales, coming in below expectations. Its namesake chain eked out just a 0.6% increase in receipts. Its Sam’s Club division fared much better, clocking 6.2% growth, but part of that was due to a rush to buy cigarettes ahead of an April 1 tax increase. Wal-Mart said March’s results were driven by the health and wellness, home and grocery segments.
Wal-Mart still expects earnings and same-store sales for its fiscal first quarter to come in at the high end of its forecast, in part due to a strong February. Wal-Mart Vice Chairman Eduardo Castro-Wright also said the company expects Easter to drive April sales performance.
Easter purchases are expected to help other retailers’ April results, but expectations for the holiday’s sales are muted this year because of the economic downturn. Shoppers also have been waiting for the last minute with holiday purchases. Last year Easter fell on March 23, the earliest in 95 years. This year Easter is April 12.
Among other retailers, the growth at Sam’s Club was also seen at rival Costco Wholesale Corp., which reported a 4% same-store-sales increase, excluding gasoline and currency fluctuations.
Discounter Target Corp. saw same-store sales drop 6.3% as customers continue to be "cautious," the company said. Target’s results were a bit better than expected.
Some specialty retailers were hard hit. Teen retailer Abercrombie & Fitch Co. missed estimates by 10 percentage points, posting a 34% tumble; these were the lowest estimates projected for any company. The company has been steadfast about refusing to cut prices, saying such a move would devalue its brand.
Among the brighter spots, TJX Corp. posted a surprise 2.1% gain and J.C. Penney & Co. beat views with a 7.2% decrease as both companies updated their fiscal first-quarter outlooks. TJX now expects earnings to be at or slightly above the high end of its February forecast, while J.C. Penney anticipates a sharply narrower loss than it had.
Ross Stores Inc. also raised its quarterly earnings view as it posted a surprise 3% same-store sales gain and said April should see 3% to 5% growth.
Retailers are still struggling against flagging consumer confidence, which edged up slightly in March after hitting an all-time low in February. Lynn Franco, who runs the Conference Board’s Consumer Research Center, said consumers don’t foresee a turnaround in economic conditions over the next six months.
Among other retailers, Children’s Place Retail Stores Inc. posted a surprise 2% drop in March same-store sales. Others who missed analysts’ views also included teen retailers Zumiez Inc., which posted a larger-than-expected 18% drop, and Wet Seal Inc., which reported an 11% fall.
High-flyer Buckle Inc. again soared above its peers, reporting a 15% jump, beating analysts’ expectations of a 13% gain. The company has posted double-digit growth in same-store sales for 20 straight months.
