Americans bagged plenty of discount goods and even some pricey fashion merchandise in February, giving retailers reason for hope after a protracted recession-induced sales slump.
The main driver was WalMart, the world's largest retailer, which reported a 5.1% surge in its same-store sales last month.
That was more than double analysts' estimates for a 2.4% increase, according to sales tracker Thomson Reuters.
Same-store sales, or sales at stores open at least a month, are a key measure of a retailer's health.
As a result of WalMart's performance, Thomson Reuters said overall February same-store sales for a group of 35 retailers that includes WalMart rose 0.3%, breaking a four-month string of monthly sales declines
The firm originally forecast February sales to decline 1.2% versus a 2.2% increase a year ago.
WalMart last reported a same-store sales gain over 5% in June 2008, when its sales increased 5.8% on the back of robust back-to-school merchandise sales.
The retailer's net sales for the month rose 2.8% to $30 billion. Separately, citing the "strength of [WalMart's] operations," the company upped its annual dividend Thursday by 15% to $1.09 a share.
WalMart said falling gas prices helped boost its discount customers' shopping budgets.
More importantly, the company said it saw an increase in both customer traffic and the average amount spent.
The retailer averages more than 130 million shoppers to its stores every week.
Some optimism
Given WalMart's status as a broad barometer of consumer strength, there's some cautious sentiment that Americans are starting to feel a bit more optimistic about the economy and their jobs.
"Although WalMart may have been the poster child of February's relatively better-than-expected industry sales performance, there was a slightly broader industry improvement for the month," said Michael Niemira, chief economist and director of research with the International Council of Shopping Centers (ICSC).
"Moreover, the last four months show an increasingly less negative performance for the industry, which is an encouraging sign and one that ultimately will form a foundation for stronger sales performance later in the year," he added.
Others adopted a wait-and-see approach.
"It's certainly good that these [retail sales] numbers aren't as bad as they've been but you need to be careful not to be put too much stock in one month's data," said Scott Hoyt, senior director of consumer economics with Moody's Economy.com.
Retail analysts point out that January and February typically are two of the slowest sales months of the year.
The other takeaway, Hoyt said, is that WalMart's results showed consumers are still shopping more for necessities than for discretionary items.
To his point, a number of higher-end merchants suffered same-store sales declines last month. Department store chain Macy's logged an 8.3% sales drop, sales at Gap Inc. fell 12%, high-end seller Nordstrom posted a decline of 15.4% and sales at Abercrombie & Fitch tumbled 30%
"Americans are still losing jobs at a prodigious rate, stock prices and home values are falling," Hoyt said. "There's not a lot of fundamental support to lift spending right now."
Stimulus question
Instead, Hoyt said he's waiting to see April and May sales results after most households receive payroll tax credits as part of President Obama's economic stimulus package.
"We'll see if consumer spending picks up in April and May after the stimulus takes effect," he said.
Besides WalMart, other merchants also reported slight improvements in their sales. Of the 35 retailers it tracks, Thomson Reuters said 57% beat analysts estimates while 43% missed expectations.
Among the most obvious winners, fashion seller The Buckle posted a 21% surge in its same-store sales and teen clothier Hot Topic logged a strong 10.8% sales gain.
A few other chains, including J.C. Penney andAmerican Eagle Outfitters reported sales drops, but the declines were about half of what analysts had forecasted.
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