Late Easter Hurts March Same-Store Sales
Several U.S. retailers reported lower same-store sales in March mainly because the Easter holiday, typically the start of the spring shopping season, falls late in April this year, analysts and companies said Thursday.
Last year, most Easter-oriented promotions and spring buying came at the end of March, because Easter fell on April 4. This year, Easter is April 23.
The late Easter trimmed as much as 3 percentage points from March sales, analysts estimated. Many retailers say they will gauge their performance this spring by combining the results of March and April.
The Bank of Tokyo-Mitsubishi retail sales index, which tracks sales at about 80 chains, rose 1.8% in March. That was the lowest monthly gain tallied since April 1996.
Even with the weakness in March, analysts said most merchants remain on track to report healthy profit gains when their quarter ends in late April.
“On balance, March sales were better than expected, and we expect things will still look good in April, which will result in strong sales and earnings,” said Jeffrey Feiner, an analyst at Lehman Bros. Inc.
The Lehman Bros. index of same-store sales growth rose 1.5% in March, versus a 9.4% gain in the year-ago period. But the firm also is optimistic about retail prospects.
“Overall, the tone of consumer spending remained favorable in March from [the] sales as well as gross margin standpoint despite higher oil prices, an increasing interest rate environment and volatility in the stock market,” Lehman said in a research note.
Discounter Kmart Corp., the nation’s third-largest retailer, said its same-store sales for the five-week period ended March 29 fell 1.2%, within the range of decline analysts expected.
Target Corp., operator of discounter Target as well as Dayton Hudson department stores, said same-store sales fell 3.6%, slightly below its expectations. Both Kmart and Target cited the Easter holiday shift for the declines.
Wal-Mart Stores Inc., the world’s largest retailer, bucked the downward trend, reporting a 3.6% rise in same-store sales for the month, even better than the 2% to 3% range of gain that analysts expected.
It was a mixed bag for department stores and specialty retailers.
Federated Department Stores Inc., whose chains include Macy’s and Bloomingdale’s, said same-store sales edged down 0.6%, and May Department Stores Co. reported a 4.3% drop.
Sears, Roebuck & Co. had a surprising 3.8% increase. J.C. Penney Co.’s same-store sales dropped 9.5%.
Women’s apparel retailer Talbots Inc. said same-store sales climbed 17.9% and said that with the improved sales trends it expects first-quarter earnings in the range of 87 to 90 cents, well above the 80 cents analysts forecast. Talbots shares jumped $2.19 to close at $60.06 on the New York Stock Exchange.
Limited Inc. reported a 4% rise in same-store sales for the month.
On the down side, Gap Inc. said Wednesday that its same-store sales dropped a steeper-than-expected 11% in March, citing “meaningfully lower” markdowns as well as the Easter holiday shift. The company also said that Chief Operating Officer John Wilson had resigned and that his position was being eliminated. Gap shares, which plunged $5.19 late Wednesday on the news, fell $1.94 to $44.06 on the NYSE.
