by Arnold J. Karr
Posted Thursday May 5, 2011
From WWD.COM
Retailers derived the expected benefits of a late Easter in their April sales results but suffered less from the effects of higher gas prices than some had feared.
Comparable-store sales results for the month, the last of the first quarter of the fiscal retail calendar, generally exceeded internal expectations and those of analysts, and many companies revised their quarterly earnings expectations upward as a result.
Although a majority of retailers exceeded the sales estimates compiled by Thomson Reuters, both upscale and midtier department stores fell short of expectations. Nordstrom Inc. and Saks Inc. posted increases of 7.6 percent and 5.8 percent, respectively, shy of the 8.1 percent and 10.3 percent anticipated. Neiman Marcus Inc. was up 8.3 percent last month, but no estimate was provided.
Kohl's Corp. was up 10.2 percent, but was expected to generate a 15.1 percent comp. J.C. Penney Co. Inc.'s 6.4 percent was below the estimate of an 8.5 percent gain. The company did raise its first-quarter earnings guidance, however, and now envisions profits of 24 cents a diluted share versus its previous range of EPS of 18 cents to 23 cents.
Topping estimates of a 8.1 percent comp pickup was Macy's Inc. It posted a 10.8 percent increase in April comps, putting its gain for the March-April period, considered a better comparison with 2010 results, at 5.3 percent. Dillard's Inc., up 11 percent, also surpassed expectations.
Stage Stores Inc., the Houston-based department store chain, now expects a loss for the quarter rather than than the profit originally projected. Andy Hall, president and chief executive officer, cited inclement weather early in the quarter and more recently "rising gas prices [which] made for a more cautious consumer" and lower-than-expected margins.
Stage still exceeded analysts' expectations with a 15.1 percent comp increase for the month, following the pattern of double-digit April increases following March results that were lowered by the late timing of Easter.
Even with the Easter benefit, Limited Brands Inc.'s 20 percent increase, led by a 25 percent surge at Victoria's Secret, easily beat expectations and prompted the specialty retailer to boost first-quarter guidance. Cato Corp. also lifted first-quarter expectations after it followed its 9 percent decline in March with a 17 percent increase in April.
Gap Inc. finished the first quarter with an 8 percent increase in April comps, with Gap North America's 2 percent increase below the 14 percent and 11 percent increases logged, respectively, by the Old Navy and Banana Republic units. The company also said that Patrick Robinson is out as executive vice president of Gap Global Design for Adult and Body.
The TJX Cos. Inc. and Ross Stores Inc. were up 5 percent and 10 percent, respectively, while Target Corp. was up 13.1 percent last month.
