Retail Sales Exceed Forecasts
Consumers kept shopping in February, pushing sales at major retailers higher than expected -- including at the beleaguered teen apparel chain Wet Seal Inc.
Sales at stores open at least a year rose 4.9%, to $49.1 billion, compared with the same month last year, according to the International Council of Shopping Centers’ tally of 69 chain stores, released Thursday.
It was the strongest monthly year-over-year gain since May 2004, when the increase was 5.4%. Same-store sales are considered a key measure of retail health.
The numbers show “that the consumer still has an appetite to spend,” said analyst Elizabeth Pierce of Sanders Morris Harris. “It’s a good way to start off the quarter.”
Though the gains were encouraging, February is of relatively minor importance to retailers, accounting for 6.2% of annual sales last year.
Some California companies logged surprisingly strong results. Foothill Ranch-based Wet Seal posted a 16.4% increase. It was the company’s second consecutive gain -- and double January’s increase -- after 2 1/2 years of steady declines.
New Chief Executive Joel Waller said he wasn’t surprised because Wet Seal, which also operates the Arden B. chain, has lowered prices in its namesake stores and stocked them with fresh offerings.
“In February we had not only the new value but the advantage of new merchandise as well,” Waller said. He added that Wet Seal had nearly finished closing the 150 namesake stores it had announced earlier that it would shutter.
Analysts were encouraged but guarded. Pierce said she thought Wet Seal merchandise looked better these days. “I’m not saying we’ve got a home run here,” she said. “I just feel, for the first time in a long time, there was notable improvement.”
Arden B. competitor Bebe Stores Inc. continued to dazzle, logging a 25.3% jump, more than twice what Wall Street expected. The results pushed shares of the Brisbane, Calif., seller of clothes for young women to a 52-week high of $32.95 during Nasdaq trading. It closed at $32.49, up $3.67, or nearly 13%.
Throughout the industry last month, companies posted gains, with those selling shoes, luxury goods and clothing for teenagers reporting especially strong results. Teen retailer American Eagle Outfitters in Warrendale, Pa., landed at the top of the heap, with a 32.4% gain in sales.
Pacific Sunwear of California Inc. of Anaheim, which sells Southern California youth apparel brands such as Billabong and Hurley, posted a 10.5% increase, twice what was expected, and Industry-based Hot Topic Inc. nudged up 0.2%; analysts had thought it would drop 2.8%.
Pleasanton, Calif.-based Ross Stores Inc. posted a 6% sales gain, better than the 3.7% that analysts had expected.
Not every company had something to crow about. San Francisco-based Gap Inc., parent of 3,000 Gap, Old Navy and Banana Republic stores, said same-store sales slipped 3%, with all divisions reporting declines. Sharper Image Corp., also in San Francisco, posted a 20% drop, a result that was considerably weaker than expected.
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February sales
Percentage change from a year earlier in sales at stores open at least one year:
Company % change
Bebe +25.3% Wet Seal +16.4 Pacific Sunwear +10.5 Target +9.0 Nordstrom +7.0 J.C. Penney +6.1 Ross +6.0 Wal-Mart +4.1 Guess +1.8 Federated +1.8 Sears +1.3 Hot Topic +0.2 Gottschalks Ð0.6 Gap Ð3.0 Limited Brands Ð4.0 May Ð4.2
Sources: Times wire services, company reports
