February Retail Sales Rise, but Analysts Differ on Outlook
The nation’s largest general retailers had unexpectedly strong February sales to lift them from their winter doldrums, but analysts differed Thursday on whether the positive results portend a strong first half for the store owners.
“On balance, they all looked pretty good,” said Joanne Legomsky, a retail industry analyst with Standard & Poor’s Corp. “It says the consumer is still in there participating.”
She said consumers, who have less deducted from their paychecks under the new tax law, “may have been more free-spending.”
Jeffrey Feiner, an analyst at Merrill Lynch & Co. in New York, called the results better than expected and noted that other factors contributed to the February performance.
“The weather was favorable and warm,” he said. “Retailers benefited from some good selling of spring merchandise, and after paying back bills in January after Christmas, consumers returned to the store.”
K mart Corp. said its overall sales jumped 13.1% last month over sales in February, 1986. Revenue from stores open at least one year rose 8.2%.
Rapidly expanding Wal-Mart Stores Inc. reported that its overall sales jumped 44% while sales at stores open at least a year rose 14%.
May Department Stores Co. reported a 15% rise in overall sales, including a 9.4% gain at stores open at least a year.
Sears, Roebuck & Co., the nation’s largest retailer, said its sales rose 4.9%. At J. C. Penney Co., sales were up 5.3%, and by 7.1% at F.W. Woolworth.
In Los Angeles, Carter Hawley Hale Stores Inc., parent company of the Broadway, Neiman-Marcus and Contempo Casuals, reported a 7.6% increase in sales.
The analysts cautioned against reading the figures too optimistically in terms of how well retailers will fare this year.
Legomsky noted that February’s contribution to retailers’ annual earnings is usually small, while Feiner said many store owners reported their sales were stronger in the early part of February before trailing off later in the month.
A more optimistic view was taken by Jeffrey Edelman, analyst with Drexel Burnham Lambert Inc.
“While February is not a big month, I think it’s interesting to point out some continuity and maintenance of consumer spending,” he said. “It bodes well for the first quarter.” Thursday’s figures cover general merchandisers and specialty apparel companies and not retailers in general, such as supermarkets or car dealers.
MAJOR RETAILERS’ SALES IN FEBRUARY
In millions Year % of dollars 1987 ago change Sears 1,846 1,760 +4.9 K mart 1,459 1,289 +13.1 J.C. Penney 780 741 +5.3 May Dept. Stores 631 549 +15.0 Federated* 549 511 +7.3 Dayton Hudson 601 503 +19.5 Wal-Mart Stores 885 615 +44.0 Woolworth 249 223 +7.1 Montgomery Ward 276 249 +11.1 Carter Hawley Hale 240 223 +7.6
* Excludes supermarket sales. Excludes foreign sales.
